Penal interest on additional sales tax was unsustainable where the assessment showed no unpaid balance and no tax was imposed.

Penal interest was not leviable on the alleged belated payment of additional sales tax because interest could be charged only where the statute authorised it and where the relevant amount was actually shown as unpaid. The later amendment applied only to unpaid additional tax or penalty imposed by the assessing authority, and the assessment order recorded a nil balance under the relevant heads. As nothing remained unpaid on the date of assessment, the demand was unsustainable and the issue was decided in favour of the assessee.

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Issues: Whether penal interest was leviable on the alleged belated payment of additional sales tax when the assessment order showed no amount remaining unpaid and no additional tax had been imposed by the assessing authority.

Analysis: Penal interest can be demanded only where the statute authorises it and where the amount on which interest is sought is actually shown as remaining unpaid. The later amendment introducing interest on unpaid additional tax operated only where additional tax or penalty imposed by the assessing authority remained unpaid. On the facts, the assessment order recorded nil balance under the relevant heads, so nothing remained unpaid on the date of assessment and no additional tax was imposed in the sense required for charging interest.

Conclusion: Penal interest was not leviable and the demand was unsustainable; the issue is decided in favour of the assessee.

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