Interest applies to delayed surcharge payments where surcharge forms part of the main sales tax liability.

Interest under section 23(3) of the Kerala General Sales Tax Act, 1963 was held applicable to delayed payment of surcharge under the Kerala Surcharge on Taxes Act, 1957. The Court treated the surcharge as an enhancement of sales tax liability, not as a separate levy, because the surcharge scheme and charging provisions showed legislative intent to integrate it with the principal tax. As section 3(1)(b) applied the Kerala General Sales Tax Act to the surcharge as it applies to tax under that Act, the interest provision extended to delayed surcharge payments. The challenge to the interest demand therefore failed.

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Issues: Whether interest can be levied under section 23(3) of the Kerala General Sales Tax Act, 1963 on delayed payment of surcharge payable under the Kerala Surcharge on Taxes Act, 1957.

Analysis: The surcharge scheme was held to be an increase in the tax payable under the Kerala General Sales Tax Act, 1963 and not a separate levy distinct from sales tax. The charging provision and the preamble of the Surcharge Act showed a legislative intention to enhance the tax itself by way of surcharge, and section 3(1)(b) made the provisions of the Kerala General Sales Tax Act, 1963 applicable to the surcharge as they apply to the tax payable under that Act. The Court distinguished the decision dealing with Central Sales Tax because that statute created a separate tax and did not adopt the whole of the State sales tax law in the same manner. On that footing, the provision for interest under the Kerala General Sales Tax Act, 1963 was treated as applicable to delayed payment of surcharge.

Conclusion: Interest was leviable on delayed payment of surcharge under section 23(3) of the Kerala General Sales Tax Act, 1963, and the challenge to the demand failed.

Ratio Decidendi: Where surcharge is statutorily made part of the sales tax liability and the principal sales tax Act is applied to the surcharge as it applies to the tax itself, the interest provision in the principal Act extends to delayed payment of surcharge.

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