State sales tax machinery can support interest levy under section 9(2), but only after statutory satisfaction is reached.

Rule 10 of the Central Sales Tax (Orissa) Rules and section 9(2) of the Central Sales Tax Act operate in different fields: section 9(2) adopts the State sales tax machinery for levy and collection of tax, penalty and interest, so annulment of interest under rule 10 did not prevent resort to section 9(2). Interest, however, is not automatic and can be levied only after the assessing authority is satisfied that the statutory conditions under section 12(4-a) of the Orissa Sales Tax Act are met. Because the notice did not require the assessee to meet that issue, the Tribunal had not examined whether interest was justified on the facts, and its contrary view was incorrect.

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Issues: Whether, after the appellate authority had annulled levy of interest under rule 10 of the Central Sales Tax (Orissa) Rules, 1957, the Revenue was precluded from invoking section 9(2) of the Central Sales Tax Act, 1956 to charge interest under the State sales tax machinery provisions.

Analysis: Rule 10 of the Central Sales Tax (Orissa) Rules, 1957 and section 9(2) of the Central Sales Tax Act, 1956 operate in different fields. Section 9(2) adopts the procedural machinery of the appropriate State sales tax law for levy and collection of tax, penalty and interest, and rule 22 of the Central Sales Tax (Orissa) Rules, 1957 further applies the Act and Rules mutatis mutandis to procedural matters not otherwise provided for. On that basis, the earlier annulment of interest under rule 10 did not bar resort to section 9(2). However, interest is not automatic and can be levied only after the assessing authority reaches the requisite satisfaction under section 12(4-a) of the Orissa Sales Tax Act, 1947 that the statutory conditions for levy are met. As the notice did not call upon the assessee to meet that issue, the Tribunal had not examined whether interest was in fact warranted on the facts.

Conclusion: The Tribunal was incorrect in holding that section 9(2) could not be invoked, and the reference was answered in the negative in favour of the Revenue.

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