Settlement scheme under sales tax law excludes extra interest on delayed payment unless the statute expressly requires it.

Under section 7(b) of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008, settlement required payment of one-third of the arrears of tax together with interest at six per cent per annum on those arrears. The provision did not require the assessee to include any further interest for belated remittance of tax, and that obligation could not be added by implication. On the plain wording of the scheme, once the prescribed tax payment and six per cent interest were made, the balance of tax, interest and penalty stood waived. The additional demand for interest on delayed payment was therefore unsustainable, and settlement was available on the basis claimed.

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Issues: Whether, under section 7(b) of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008, the assessee was required to pay interest on belated payment of tax in addition to one-third of the arrears of tax with interest at six per cent per annum on the arrears of tax.

Analysis: The statutory scheme under section 7(b) required payment of one-third of the arrears of tax pending collection together with interest at six per cent per annum on the arrears of tax. The provision did not state that interest payable for delayed remittance of tax had to be included in the amount to be paid for availing the settlement benefit. On the plain wording of the section, once the prescribed payment of tax and six per cent interest on the arrears of tax was made, the balance of tax, interest and penalty stood waived. The demand for further interest on belated payment therefore went beyond the language of the statute.

Conclusion: The additional demand for interest on belated payment was unsustainable, and the assessee was entitled to settlement under the scheme on the basis claimed.

Ratio Decidendi: Where a settlement provision specifies payment of a fixed fraction of tax arrears with interest at a stated rate on those arrears, courts will not read into it an additional obligation to pay further interest unless the statute expressly so provides.

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