Interest on undisclosed taxable turnover follows from the statutory due date, and a belated revised return does not defeat liability.

Interest was leviable on tax that became due after the assessee crossed the exemption limit but failed to disclose the correct turnover or remit tax in time. The Kerala HC applied section 23(3) of the Kerala General Sales Tax Act, 1963, and noted that section 23(3A) also fastens interest where turnover is omitted from the return or escapes assessment, from the date tax should have fallen due. A belated revised return did not suspend or erase the accrued liability, because the dealer had a continuing duty to file a true return and pay tax on the expiry of exemption. The levy of interest was upheld.

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Issues: (i) Whether interest was leviable on the tax due after the assessee's exemption limit was exhausted though the tax was not collected or remitted in the return; (ii) Whether a belated revised return could defeat or defer the liability to interest.

Issue (i): Whether interest was leviable on the tax due after the assessee's exemption limit was exhausted though the tax was not collected or remitted in the return.

Analysis: The assessee's turnover had crossed the exemption limit during the relevant year, but the return did not disclose the correct liability and tax was not paid when due. Interest under section 23(3) of the Kerala General Sales Tax Act, 1963 applies when tax or any other amount assessed or due is not paid within the prescribed time. The Court also noted that section 23(3A), inserted with effect from 1 April 1998, fastens interest where turnover is omitted from the return or escapes assessment, from the date on which tax would have fallen due had it been included correctly.

Conclusion: Interest was lawfully leviable, and the assessee's challenge failed on this issue.

Issue (ii): Whether a belated revised return could defeat or defer the liability to interest.

Analysis: The revised return was treated as immaterial because the dealer was under a continuing statutory duty to file a true and correct return and to pay tax on expiry of the exemption period. The liability to interest was not displaced by the later revised return, and rule 18(2A) could not be used to nullify the accrued statutory consequence of non-payment when due.

Conclusion: The revised return did not affect the liability to interest, and the assessee's contention was rejected.

Final Conclusion: The levy of interest was upheld and the appeal was dismissed, leaving the revenue's demand intact.

Ratio Decidendi: Where a dealer fails to disclose taxable turnover and pay tax on the expiry of exemption, interest follows from the statutory due date and is not displaced by a later revised return.

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