Statutory interest on delayed tax payment survives a stay order and cannot be avoided by absence of formal demand.

Interest under section 16(3) of the Andhra Pradesh General Sales Tax Act remained payable where tax was not paid within the time fixed in the assessment notice, even though the demand portion had been scored out because of a court stay. The stay only prevented the authorities from issuing the usual demand and did not suspend the statutory charge to interest. A dealer who obtained and benefited from interlocutory protection could not rely on the absence of a formal demand to defeat liability for delayed payment. The objection to levy of interest therefore failed.

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Issues: Whether interest under section 16(3) of the Andhra Pradesh General Sales Tax Act, 1957, was leviable when the assessment notices had the payment-demand portion scored out because of stay orders and the tax was paid only after the stay was vacated.

Analysis: Interest under section 16(3) is a statutory incident of non-payment within the time specified in the notice of assessment or instalment order. The scoring out of the demand clause in the assessment notices was only because the Court's stay orders prohibited the authorities from making the usual demand, and the dealers themselves had obtained and benefited from those orders. The absence of a formal demand in the notice could not be used to defeat the statutory liability to interest. A stay order does not suspend the operation of the charging provision for interest, and interlocutory protection cannot confer an unintended immunity once the main proceedings have failed.

Conclusion: Interest under section 16(3) was payable, and the objection to its levy failed.

Ratio Decidendi: Where tax is assessed and the assessee obtains a stay that prevents a formal demand from being issued, the assessee cannot rely on the absence of that demand to avoid the automatic statutory liability to interest on delayed payment.

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