Interest on delayed Central sales tax cannot be recovered through State interest machinery without a substantive Central Act liability.

Interest on delayed payment of Central sales tax could not be recovered under section 35-A of the Assam Sales Tax Act, 1947 read with section 9(2) of the Central Sales Tax Act, 1956. The controlling principle was that section 9(2) authorises State authorities to assess, reassess, collect and enforce Central sales tax only for procedural purposes, while section 9(2-A) extends only State provisions on offences and penalties. In the absence of any substantive provision in the Central Act creating liability to pay interest on Central sales tax, State machinery provisions for charging interest were inapplicable.

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Issues: Whether interest on delayed payment of Central sales tax could be levied and recovered by invoking section 35-A of the Assam Sales Tax Act, 1947 read with section 9(2) of the Central Sales Tax Act, 1956.

Analysis: The controlling question was governed by the Supreme Court's interpretation of section 9(2) and section 9(2-A) of the Central Sales Tax Act, 1956. It was held that section 9(2-A) makes applicable only the provisions relating to offences and penalties contained in the State Act, while section 9(2) permits the State sales tax authorities to assess, reassess, collect and enforce Central sales tax as if it were State sales tax only for procedural purposes. The State machinery for charging interest could be used only where the Central Act itself contained a substantive obligation to pay interest on Central sales tax. As the Central Act contained no such substantive provision, interest could not be recovered under section 35-A of the Assam Sales Tax Act in aid of Central sales tax.

Conclusion: Levy and recovery of interest on delayed payment of Central sales tax under section 35-A of the Assam Sales Tax Act, 1947 were impermissible and the challenge succeeded.

Ratio Decidendi: In the absence of a substantive provision in the Central Sales Tax Act imposing liability to pay interest on delayed Central sales tax, State machinery provisions for interest cannot be applied to recover such interest.

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