Escaped assessment and statutory interest: interest runs from the date tax would have been due if turnover had been disclosed.

Interest under section 23(3A) of the Kerala General Sales Tax Act was payable on escaped turnover from the date tax would have fallen due if the turnover had been correctly included in the return. The court treated the omission as escaped assessment because the dealer had claimed exemption over goods not covered by the exemption certificate, and the record showed the taxable character of those goods was known during the relevant period. On that basis, statutory interest accrued on the tax due, and the challenge to the levy failed.

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Issues: Whether interest under section 23(3A) of the Kerala General Sales Tax Act, 1963 was payable on escaped turnover from the date on which tax would have fallen due, and whether the assessee could avoid such liability on the footing that the turnover was shown as exempt.

Analysis: The assessing authority, the Deputy Commissioner, and the Commissioner concurrently found that the turnover had escaped assessment. The provision applied where a dealer failed to include turnover in the return or where turnover escaped assessment, and interest accrued on the tax due from the date on which it would have fallen due had the turnover been correctly included. The assessee had claimed exemption over the entire turnover despite selling goods not covered by the exemption certificate, and the record showed that the taxable character of those goods was known in the relevant period. In these circumstances, the omission was treated as a case of escaped assessment attracting statutory interest.

Conclusion: Interest under section 23(3A) was rightly levied on the escaped turnover, and the assessee's challenge failed.

Final Conclusion: The liability to pay interest followed from the escaped assessment itself, with interest running from the date the tax should have been paid had the turnover been disclosed.

Ratio Decidendi: Where turnover is found to have escaped assessment, statutory interest accrues from the date the tax would have become due had the dealer included that turnover in the return.

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