Interest for delayed tax remittance follows the actual period of default under Tamil Nadu sales tax law, not a full month

Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 authorises interest at two per cent per month on tax remaining unpaid after the due date for the actual period of default. On a three-day delay in remitting tax, the levy was treated as interest for that short default period rather than for a full month, and the demand was considered consistent with the statutory language and not excessive. The stated ratio is that unpaid tax beyond the due date attracts interest at the prescribed monthly rate for the period of default.

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Issues: Whether penalty or interest levied under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 for a three-day delay in remitting tax was lawful.

Analysis: Section 24(3) provides for interest at two per cent per month on any amount remaining unpaid after the due date, for the entire period of default. The tax amount remained unpaid beyond the specified date, and the levy of Rs. 7,720 was found to represent interest only for the three-day period of default, not for the whole month. On that basis, the demand was held to be consistent with the statutory language and not excessive or unsustainable.

Conclusion: The levy was upheld and the challenge failed.

Ratio Decidendi: Where tax remains unpaid beyond the due date, section 24(3) authorises interest at the prescribed monthly rate for the actual period of default.

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