Court rules no interest on disputed tax demands under U.P. Trade Tax Act

The Allahabad HC dismissed two revision petitions by the Commissioner of Trade Tax, ruling that no interest was payable on the demand of additional tax under section 22 of the U.P. Trade Tax Act for assessment years 1989-90 and 1988-89. The court concurred with the Tribunal's decision that interest is not chargeable in cases of bona fide disputes regarding the levy of additional tax. Interest is only payable on tax amounts acknowledged as due, not on disputed additional tax.

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The Allahabad High Court dismissed two revision petitions by the Commissioner of Trade Tax, holding that no interest was payable on the demand of additional tax under section 22 of the U.P. Trade Tax Act for assessment years 1989-90 and 1988-89. The Tribunal ruled that interest cannot be charged when there is a bona fide dispute about the levy of additional tax. The court agreed with the Tribunal's decision, stating that interest is payable only on tax that was admittedly due, not on additional tax that was disputed. The revision petitions were dismissed.

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