Statutory interest on tax defaults applies despite revised returns, retrospective validation, and related levies, but hearing defects vitiate revision.

Interest under section 24(3) of the Tamil Nadu General Sales Tax Act accrued automatically when tax remained unpaid after the statutory due date, and later filing of revised or supplementary returns did not erase the earlier default. The same interest mechanism applied to additional sales tax, surcharge, and works contract liabilities, including liabilities validated retrospectively, because the underlying tax obligation and recovery machinery stood attracted from the relevant date. A revisional order passed without affording the dealer a personal hearing was procedurally defective and was set aside for fresh disposal after hearing.

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Issues: (i) Whether penal interest under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 is leviable on tax paid through revised or supplementary returns before final assessment or on amounts which became payable only upon later determination; (ii) whether penal interest can be levied on additional sales tax, surcharge, and works contract liabilities, including liabilities arising under retrospective legislation; (iii) whether a revisional order rejecting relief without affording a personal hearing could be sustained.

Issue (i): Whether penal interest under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 is leviable on tax paid through revised or supplementary returns before final assessment or on amounts which became payable only upon later determination.

Analysis: The statutory scheme was read as making interest under section 24(3) automatic once the amount legally payable remained unpaid after the date fixed under section 24(1). The Tribunal distinguished cases where tax became ascertainable only on later events from cases where the dealer had already withheld or underpaid tax due on the monthly return basis. Where the dealer was required to include the turnover in the original return and paid only later by revised return, the later payment did not erase the earlier default. The Tribunal also held that the assessee could not avoid interest by treating disputed or omitted turnover as outside the return when the liability was already attracted under the Act.

Conclusion: Penal interest under section 24(3) was held leviable in such cases and the challenge to the levy largely failed.

Issue (ii): Whether penal interest can be levied on additional sales tax, surcharge, and works contract liabilities, including liabilities arising under retrospective legislation.

Analysis: The Tribunal held that additional sales tax and surcharge were statutory levies operating through the principal sales tax enactment and the corresponding rules, and therefore the interest provision in the principal Act applied to defaults in those levies as well. It further held that the retrospective validation of works contract tax by the later amending legislation did not exempt dealers from consequential interest, since the underlying tax liability and the machinery for recovery stood validated from the retrospective date. On the works contract cases, the Tribunal concluded that revised returns and later payment before final assessment did not defeat interest where the statutory liability had already accrued under the validated regime.

Conclusion: The levy of penal interest on additional sales tax, surcharge, and works contract liabilities was upheld.

Issue (iii): Whether a revisional order rejecting relief without affording a personal hearing could be sustained.

Analysis: In the case where the revision had been rejected without hearing, the Tribunal found that the statutory procedure required disposal after hearing the dealer and that the order suffered from procedural infirmity. The matter was therefore required to be restored for fresh consideration.

Conclusion: The procedural rejection was set aside and the matter was remitted for fresh disposal after hearing.

Final Conclusion: The Tribunal upheld the levy of penal interest in the bulk of the batch matters, including cases involving revised returns, surcharge, additional sales tax, and works contract liabilities, but granted relief in the limited case where the revisional order had been passed without proper hearing and in the case concerning instalment directions during the pendency of revision.

Ratio Decidendi: Under the Tamil Nadu sales tax scheme, interest under section 24(3) follows the statutory default in payment on the due date and is not avoided merely because the dealer later files a revised return or because the liability is quantified only on final assessment or by retrospective validation of the tax.

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