Penal interest for unpaid sales tax cannot start from the return due date when no return or self-assessment exists.

Penal interest under the Kerala General Sales Tax Act arises only when tax or other assessed amount remains unpaid within the prescribed time. Where no return was filed and no self-assessment was made, the tax could not be treated as due from the notional due date for filing the return, and penal interest could not run from that date until assessment and demand. The analysis distinguishes default in filing returns from non-payment of tax due on self-assessment or assessment, and applies the rule that a casus omissus cannot be supplied by interpretation. The result is that penal interest was not leviable from the return due date in such circumstances.

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Issues: Whether penal interest under section 23(3) of the Kerala General Sales Tax Act, 1963 could be levied from the date when the return was due, even though no return was filed and no tax was paid on self-assessment basis, until assessment was completed and demand notice was issued.

Analysis: The liability to pay penal interest under section 23(3) arises when tax or other amount assessed or due is not paid within the prescribed time. The provision was construed in the light of the statutory scheme, including the separate consequence provided for failure to file returns. The Court held that where no return was filed and no self-assessment was made, the tax could not be treated as due from the notional due date for filing the return so as to attract penal interest. The Court relied on the principle that a casus omissus cannot be supplied by judicial interpretation and on the distinction between tax becoming due on self-assessment or assessment, and default in filing returns which may attract other penal consequences.

Conclusion: Penal interest under section 23(3) was not leviable from the date the return was due in the absence of an actual return or self-assessment. The issue was decided in favour of the assessee.

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