Interest before revised demand cannot be levied where tax was already paid and no outstanding liability existed.

Interest cannot be levied for any period before tax liability is finally determined and demand is raised in revisional proceedings, particularly where the assessee had already paid the tax shown in the returns and the original assessment had accepted that position. The legal position noted is that, absent prior evasion or an admitted outstanding liability, interest does not accrue merely because a revisional authority later initiates suo motu action and creates a demand thereafter. The assessee is therefore not liable for interest for the pre-demand period under the Punjab General Sales Tax Act, 1948.

---

---

Issues: Whether interest can be levied for the period prior to the raising of demand in revisional proceedings under the Punjab General Sales Tax Act, 1948.

Analysis: The assessee had already paid the tax due according to the returns and the claim had been accepted at the assessment stage. The revisional authority later initiated suo motu action and raised the demand only thereafter. On the settled legal position, interest cannot be fastened for any period before the tax liability is finally determined and demand is raised, especially where there was no prior evasion or outstanding admitted tax liability.

Conclusion: The assessee is not liable to pay interest for the period before the demand was raised in the revisional proceedings.

---