Statutory interest on delayed turnover tax continues despite restraint and instalment orders, where tax remains unpaid in time.

A restraint on tax collection and a later instalment order do not stop statutory interest from accruing on unpaid turnover tax, because interest follows non-payment within the prescribed time and is not displaced unless the order expressly suspends that consequence. The dealer's returns also did not avoid interest liability: the statutory scheme required not only disclosure of turnover and tax due, but timely payment with the prescribed challan, and incomplete or unpaid returns remained within the interest provisions. On the stated facts, the dealer continued to be liable for interest on delayed turnover tax, and the demand could not be quashed on the basis of the court orders or the form of the returns.

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Issues: (i) Whether the interim order and the later instalment order passed by the High Court prevented accrual of interest on delayed turnover tax under the relevant sales tax provisions. (ii) Whether the returns filed by the dealer were complete returns so as to affect liability under the interest provisions.

Issue (i): Whether the interim order and the later instalment order passed by the High Court prevented accrual of interest on delayed turnover tax under the relevant sales tax provisions.

Analysis: The liability to interest arose from non-payment of the tax within the statutory time. The interim restraint operated against the taxing authorities and did not prohibit the dealer from paying the tax, and it did not suspend the statutory running of interest. The later order directing payment by instalments only regulated the mode of payment of arrears and did not decide, expressly or by implication, that no interest would accrue. Interest under the statute was treated as a consequence of delayed payment and not as something displaced by the court orders.

Conclusion: The interim order and the instalment order did not nullify or suspend liability to statutory interest.

Issue (ii): Whether the returns filed by the dealer were complete returns so as to affect liability under the interest provisions.

Analysis: The statutory scheme required not merely disclosure of turnover and tax payable, but also payment of the computed tax by the prescribed date, supported by the necessary challan. On the facts, some returns omitted the reason for non-payment of tax, and in any event the tax remained unpaid within time. Even where the reason for non-payment was stated, that explanation did not displace the statutory consequence of delayed payment. Depending on the particular return, the case fell within the relevant sub-section governing filed returns without full payment or, alternatively, returns not duly completed for turnover tax purposes.

Conclusion: The returns did not prevent the fastening of interest under the statutory provisions.

Final Conclusion: The dealer remained liable to interest on delayed turnover tax, and the demand could not be quashed on the basis of the High Court orders or the manner in which the returns were filed.

Ratio Decidendi: A court order restraining collection of tax or allowing instalment payment does not stop the statutory accrual of interest on unpaid tax, and interest follows once the tax is not paid within the prescribed time.

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