Export sale exemption failed, so interest became payable on the unpaid turnover under sales tax law.

Interest under section 8(1) of the Uttar Pradesh Sales Tax Act was leviable where the dealer's claim that turnover represented a sale in the course of export failed. A sale qualifies as export only if there is a direct and inextricable nexus with the actual export, supported by material such as an export order and matching shipping documents; mere supply to an export-oriented unit is insufficient. Once the exemption claim failed, the turnover remained tax admittedly payable, and the dealer's plea of bona fide dispute did not defeat interest liability. The appellate deletion of interest was therefore unsustainable, and the assessee's challenge failed.

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Issues: Whether interest was payable under section 8(1) of the Uttar Pradesh Sales Tax Act on turnover treated as central sales after the claim that the transaction was a sale in the course of export failed.

Analysis: A sale can qualify as a sale in the course of export only when there is a direct and inextricable connection between the sale and the actual export, so that the sale occasions the export. Mere supply to an export-oriented unit, without proof of export order, matching shipping documents, or other material establishing the required link, is insufficient. Once the dealer failed to substantiate the export claim, the turnover remained part of the disclosed turnover and the tax thereon became tax admittedly payable within the meaning of section 8(1). The plea of bona fide dispute did not assist the dealer, because the liability to interest under the provision does not depend on mala fides where the turnover has in fact remained unpaid and the claim for exemption has failed.

Conclusion: Interest under section 8(1) was payable on the disputed turnover, and the deletion of interest by the appellate authorities was unsustainable.

Final Conclusion: The revision succeeded, and the assessee's challenge to the levy of interest failed.

Ratio Decidendi: Where a dealer claims exemption on the footing that a turnover is a sale in the course of export but fails to establish the requisite nexus with actual export, the turnover remains tax admittedly payable and interest under section 8(1) is leviable.

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