Interest on belated sales tax payment runs only from crystallisation of liability, not the assessment year's start.

Interest under section 23(3) of the Kerala General Sales Tax Act could not be charged from 1 May of the relevant assessment years where the tax liability on concrete pole turnover was not admitted in the original returns and crystallised only on filing of revised returns. The revised returns and prompt payment showed that interest on belated payment ran only from the date the liability became fixed, not from the start of the assessment year. However, because payment was made after the revised returns were filed, interest remained payable for the limited period of delay between filing and remittance.

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Issues: Whether interest under section 23(3) of the Kerala General Sales Tax Act was payable from 1 May of the relevant assessment years or only from the date of filing of the revised returns and actual remittance of tax.

Analysis: The liability to pay tax on the turnover of concrete poles was not admitted in the original returns. The tax liability arose only when the revised returns were filed and the tax due under those returns was paid shortly thereafter. Until the revised returns were filed, the tax on that turnover had not been crystallised for the purpose of charging interest on belated payment. The earlier assessment dispute and the subsequent acceptance of the revised returns showed that interest could not be levied from the first day of the assessment years. At the same time, since payment under the revised returns was delayed, interest was still payable for the period of delay between the filing of the revised returns and the date of payment.

Conclusion: Interest was not payable from 1 May of the assessment years concerned, but was payable only for the short delay between 11 February 1999 and 18 February 1999.

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