Sales tax interest cannot be imposed automatically where concession certificate remains valid and no enforceable demand exists.

Interest under the Orissa Sales Tax Act was held payable only where the statutory conditions under section 12(4-a) or section 13(6) were satisfied, and not as an automatic consequence of assessment or notice. Because the eligibility certificate for sales tax concession was still operative, had not been withdrawn, and no completed default or valid enforceable demand existed, the demand for interest and penalty could not be sustained. The court also applied the principle that interest or penalty cannot be imposed without specific notice and opportunity where the law requires a default-based levy.

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Issues: Whether, in the facts of the case, the sales tax authorities could levy interest and penalty on the petitioner when the eligibility certificate for sales tax concession remained operative and no valid demand for interest had been made.

Analysis: The liability to pay interest under the Orissa Sales Tax Act arose only in the situations covered by section 12(4-a) or section 13(6). Section 12(4-a) was found inapplicable, and section 13(6) was treated as operating only on a default, with the further proviso that interest on tax or penalty pending appeal or revision would arise only on the amount ultimately found due. The petitioner's eligibility certificate had not yet been withdrawn, since a show cause notice had merely been issued and the time for response had not expired. In that situation, the demand for interest and penalty could not be sustained. The Court also relied on the principle that, absent a specific notice and opportunity, interest cannot be imposed as an automatic consequence.

Conclusion: The levy of interest and penalty was held to be impermissible against the petitioner on the facts then existing.

Final Conclusion: The writ petitions were disposed of with a direction to the petitioner to pay the tax in two instalments, while the revenue's claim to charge interest or penalty was negatived on the existing facts.

Ratio Decidendi: Interest under the sales tax law could not be levied as an automatic consequence in the absence of a completed default situation and a validly enforceable demand, particularly where the relevant exemption certificate still remained in force.

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