Interest on delayed tax deposit applies only for the actual period of default, not a full month for part-month delay.

Interest under section 7(1-B) of the U.P. Sales Tax Act is chargeable from the day after the return due date at two per cent for every month or part of a month, but a short delay does not automatically become a full month for interest purposes. The provision was construed to require interest only for the actual period of default, including completed months and the remaining days of a partial month. On that construction, where the delay covered only part of a month, interest could not be levied for the whole month and was limited to the actual days of delay.

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Issues: Whether, under section 7(1-B) of the U.P. Sales Tax Act, interest on delayed tax deposit is chargeable for the actual period of delay when the default is only for a part of a month, or for the whole month.

Analysis: The provision prescribed interest at two per cent for every month or part thereof from the date immediately following the last date prescribed for submission of the return. The expression was construed to mean that interest accrues for completed months as well as for the remaining part of a month, but not that a delay of only a few days must be treated as a full month. Applying that construction, the short delays in the present case attracted interest only for the actual days of default.

Conclusion: Interest under section 7(1-B) cannot be charged for the whole month where the default is only for part of a month; it is chargeable only for the actual period of delay, in favour of the assessee.

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