Advance-tax interest under section 18A(8) follows automatically when statutory payment is not made, without a separate levy order.

Interest under section 18A(8) of the Income-tax Act, 1922 was treated as payable where advance tax was not paid in the statutory manner; a refundable amount, even if capable of adjustment, did not amount to payment of advance tax on the prescribed dates, and a refund under section 49E did not satisfy the scheme. The interest followed automatically on regular assessment and could be included in the assessment order without a separate levy order. The challenge was also vulnerable to delay and laches because the assessee pursued futile appellate steps despite the settled position that no appeal lay against such interest.

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Issues: (i) Whether interest under section 18A(8) of the Income-tax Act, 1922 could be levied where the assessee claimed that refundable amounts should have been adjusted against the advance-tax demand and, therefore, there was no failure to pay advance tax. (ii) Whether a separate order was required for levy of interest under section 18A(8) and whether the writ petition was liable to be dismissed on delay and laches.

Issue (i): Whether interest under section 18A(8) of the Income-tax Act, 1922 could be levied where the assessee claimed that refundable amounts should have been adjusted against the advance-tax demand and, therefore, there was no failure to pay advance tax.

Analysis: Section 18A(8) applies where no payment of tax has been made in accordance with the prescribed advance-tax provisions. A mere refund due to the assessee, even if capable of being adjusted, is not itself a payment of advance tax in the manner contemplated by the section. The adjustment of a refundable amount does not satisfy the statutory requirement of payment on the specified dates, and a refund under section 49E does not convert the amount into a payment made in accordance with the advance-tax scheme.

Conclusion: The levy of interest under section 18A(8) was valid and the contention of the assessee failed.

Issue (ii): Whether a separate order was required for levy of interest under section 18A(8) and whether the writ petition was liable to be dismissed on delay and laches.

Analysis: Interest under section 18A(8) is to be calculated in the manner provided by the statute and added to the tax determined on regular assessment; it is not dependent on a separate order of levy. The assessment order itself was sufficient for inclusion of the interest amount. The petition was also filed after pursuing futile appellate proceedings despite the settled position that no appeal lay against such interest, showing gross negligence and unexplained delay.

Conclusion: No separate order for interest was necessary, and the writ petition was also liable to fail on delay and laches.

Final Conclusion: The challenge to the interest demand under the advance-tax provisions was rejected on merits and on the additional ground of delay and laches, so the writ petition could not succeed.

Ratio Decidendi: Where advance tax is not paid in the statutory manner, interest under section 18A(8) follows automatically on regular assessment as part of the tax demand, and a refundable amount or its adjustment does not amount to payment in accordance with the section.

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