Interest on sales tax paid before assessment was not leviable where no statutory default had arisen under the return-based scheme.

Interest under Section 47(4A) of the Gujarat Sales Tax Act was held not leviable where the assessee had already remitted the tax shown in the returns before the assessment order and the liability had not been finally determined. The provision was applied on the basis that interest is attracted only when tax payable under the statutory scheme remains unpaid and a default exists. Since the return had not been rejected or disapproved before payment, the later assessment did not create a prior default, and the interest levy could not be sustained.

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Issues: Whether interest was leviable under Section 47(4A) of the Gujarat Sales Tax Act, 1969 on tax paid before the assessment order, where the tax shown in the returns had already been remitted and the liability was not finally determined at the time of payment.

Analysis: The reference and connected appeals turned on the interpretation of interest liability for delayed payment of tax when the assessee had paid the amount before assessment. The reasoning followed the principle that interest under the relevant provision is attracted only when the tax payable, as understood on the basis of the return and the statutory scheme, remains unpaid so as to constitute a default. Where the amount has been paid prior to the assessment order and the return has not yet been rejected or disapproved, there is no failure to meet the statutory obligation merely because the final assessment is made later.

Conclusion: Interest under Section 47(4A) was not payable on the tax already paid before assessment, and the levy made by the Sales Tax Officer could not be sustained.

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