Retrospective tax rate increase does not by itself create interest liability where tax was already paid and return accepted.

Where tax was duly paid on the basis of the rate in force when the final return was filed and accepted, a later retrospective enhancement of the tax rate did not, by itself, create liability to pay interest on the amount. The court treated the closure of the business and acceptance of the return as decisive, and held that the subsequent increase could not be used to reopen the matter for interest under section 22. The assessee was therefore not liable to pay interest on the enhanced tax amount.

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Issues: Whether the assessee was liable to pay interest under section 8(1) on the enhanced tax amount arising from a retrospective increase in the tax rate.

Analysis: The assessee had filed its final return and paid tax at the rate then in force before the notification enhancing the rate of tax on besan was issued. The enhanced rate was introduced later with retrospective effect, but the business had already closed and the return had been finally accepted. In these circumstances, the subsequent enhancement could not justify reopening the matter to impose interest on the additional amount under section 22.

Conclusion: The assessee was not liable to pay interest on the enhanced tax amount.

Ratio Decidendi: Where tax has been duly paid and the return accepted on the basis of the law and rate in force on the filing date, a later retrospective enhancement of tax rate does not by itself create liability to pay interest on the amount.

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