Interest on delayed quarterly return tax runs from the prescribed due date; no demand notice is needed for liability to arise.

Where tax shown as due in quarterly returns was not paid by the last date prescribed for filing the return, interest became payable from that expiry date until payment. The Supreme Court of India held that section 8(3) fixed the payment deadline for such self-assessed tax, and default triggered liability to interest under section 8(2). The reference in section 8(2) to a demand notice was confined to tax assessed under section 8(1), where assessment is followed by a notice of demand, and did not apply to tax already payable under section 8(3). The plea that a demand notice was a prerequisite was rejected.

---

---

Issues: Whether interest was payable under section 8(2) on tax due on the basis of quarterly returns when the tax was not paid by the last date prescribed for filing the return under section 8(3), even without a demand notice.

Analysis: Section 8(3) required tax due on quarterly returns to be paid before the expiry of the last date for filing such return. On default, the tax became payable at the latest from that expiry date, and section 8(2) applied to recovery of the demand and the consequential liability to interest. The reference in section 8(2) to a demand notice was held to relate to tax assessed under section 8(1), where a notice of demand follows assessment, and not to tax payable under section 8(3), which is governed by its own rule of payment. Since the admitted position was that the tax due on quarterly return was not paid in time, interest followed from the prescribed last date until payment.

Conclusion: Interest was payable on the delayed tax amount from the last date fixed for filing the quarterly return, and the plea that a demand notice was necessary was rejected.

---