Self-assessment tax default triggers automatic interest; earlier-year refund claims cannot be set off against later-year tax liability.

Under the self-assessment scheme, a complete return filed without proof of tax payment falls under rule 18(3) of the Tamil Nadu General Sales Tax Rules, not rule 18(4), so tax becomes due on receipt of the return or the last due date and interest under section 24(3) is recoverable without a prior notice of demand. A separate claim for refund of excess tax paid in an earlier year cannot be unilaterally adjusted against tax payable for a later year, and it does not suspend or extinguish the statutory liability for current tax and consequential interest. The revenue demand was sustained and the refund claim was left to be pursued independently.

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Issues: (i) Whether a return filed under the self-assessment scheme without proof of payment of tax falls under rule 18(3) or rule 18(4) of the Tamil Nadu General Sales Tax Rules, and whether interest under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 becomes recoverable without a notice of demand. (ii) Whether a dealer can adjust a claimed refund relating to an earlier year against the tax payable for the subsequent year so as to avoid liability under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959.

Issue (i): Whether a return filed under the self-assessment scheme without proof of payment of tax falls under rule 18(3) or rule 18(4) of the Tamil Nadu General Sales Tax Rules, and whether interest under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 becomes recoverable without a notice of demand.

Analysis: Rule 18(3) governs a complete return where the only default is non-payment of tax or failure to enclose proof of payment. In that situation, the tax becomes due on the receipt of the return or the last due date, and recovery follows under the Act without any notice of demand. Rule 18(4) applies only when the return is not filed in time, or when it is incorrect or incomplete in the sense contemplated by that provision. The amended section 24(3) makes interest payable automatically on any amount remaining unpaid after the due date, and the liability is not dependent on a further assessment order or discretionary act by the assessing authority.

Conclusion: The case fell under rule 18(3), and interest under section 24(3) was recoverable without a prior notice of demand.

Issue (ii): Whether a dealer can adjust a claimed refund relating to an earlier year against the tax payable for the subsequent year so as to avoid liability under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The right to pursue a refund for excess tax paid in an earlier year is a separate and independent remedy. It does not operate as payment of tax for the later year, nor does it suspend or extinguish the statutory liability to pay current tax and the consequential interest for default. The statutory scheme does not permit unilateral adjustment of such refund claims against the tax that has become payable for the subsequent year.

Conclusion: The refund claim could not be adjusted against the tax payable, and the demand raised by the Revenue was sustained.

Final Conclusion: The writ appeal failed, and the assessee remained liable for the tax and interest demanded under the statutory scheme, leaving its refund claim to be pursued independently.

Ratio Decidendi: Where a dealer files a complete return without paying the tax due, statutory interest and recovery follow automatically under the self-assessment provisions, and an unrelated refund claim cannot be set off against that liability.

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