Void statutory basis of assessment cannot support penalty or interest; consequential demands fall with the provision.

An assessment founded solely on section 4-B of the Punjab General Sales Tax Act could not survive once that provision had been struck down by the Supreme Court. The consequential penalty and interest levied for non-payment or delayed payment under the same provision also fell with the assessment, because all demands derived from a void statutory basis were unsustainable. The assessment and consequential levies were quashed, while the assessing authority was left free to proceed afresh in accordance with law.

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Issues: Whether the assessment made under section 4-B of the Punjab General Sales Tax Act, 1948, along with the penalty and interest levied thereunder, was liable to be quashed.

Analysis: The provision under which the assessment was made had already been struck down by the Supreme Court. Once the statutory basis of the assessment ceased to survive, the assessment made under that provision, together with the consequential levy of penalty and interest for non-payment or delayed payment of the amount covered by that provision, could not stand.

Conclusion: The assessment under section 4-B, as well as the penalty and interest levied on that basis, was quashed in favour of the assessee, with liberty to the Assessing Authority to proceed afresh in accordance with law.

Ratio Decidendi: Where the statutory provision forming the sole basis of assessment has been struck down, the assessment and all consequential demands founded on it cannot survive.

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