Interest on later-enhanced tax rate was not payable when tax had been deposited at the earlier accepted rate without mala fide conduct.

Interest was not leviable where the assessee had deposited admitted tax at 3.5% in line with earlier assessments and the rate was later enhanced to 7%. The Tribunal recorded no finding of mala fide conduct in the assessee's failure to pay at the higher rate. On that basis, the higher later rate did not justify charging interest, and interest was held not payable.

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Issues: Whether interest was leviable on the assessee where tax had been deposited at 3.5% on the basis of earlier assessments but the rate was subsequently enhanced to 7%.

Analysis: The Tribunal had not recorded any finding that the assessee acted mala fide in not depositing tax at the higher rate. The assessee had deposited the admitted tax at the rate previously accepted in earlier assessments, and the higher rate was fixed later. In these circumstances, the non-payment of tax at 7% could not justify charging interest.

Conclusion: Interest was not payable by the assessee.

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