Sales tax interest liability depends on an enforceable unpaid tax demand; nil reassessment bars interest and uncertain cases need verification.

Interest under section 22 of the Assam General Sales Tax Act was chargeable only where an enforceable unpaid tax liability survived. After de novo assessment on remand, the reassessed liability in some matters resulted in nil demand, so no interest could be levied and the impugned orders were quashed. In the remaining writ petitions, balance-interest notices were issued, but the factual basis for any surviving tax liability was unclear. The HC therefore required fresh verification by the assessing authority before any interest could be sustained and remanded those matters for reconsideration in accordance with law.

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Issues: (i) Whether interest under section 22 of the Assam General Sales Tax Act was payable when, after de novo assessment pursuant to remand, the reassessed liability resulted in nil demand. (ii) Whether the writ petitions in which balance-interest demand notices were issued required fresh verification of the existence and extent of tax liability before interest could be levied under section 22.

Issue (i): Whether interest under section 22 of the Assam General Sales Tax Act was payable when, after de novo assessment pursuant to remand, the reassessed liability resulted in nil demand.

Analysis: Section 22 contemplates interest where tax remains unpaid on the basis of returns, a notice of demand, or an assessment that shows excess liability. After the earlier assessment and demand notice were set aside, the competent authority made fresh assessments in accordance with the direction for de novo assessment. In the two matters concerned, the reassessment resulted in nil demand, so there was no outstanding tax on which interest could be computed.

Conclusion: Interest was not payable in the matters where the de novo assessment resulted in nil demand, and the impugned orders were quashed.

Issue (ii): Whether the writ petitions in which balance-interest demand notices were issued required fresh verification of the existence and extent of tax liability before interest could be levied under section 22.

Analysis: In the remaining matters, the demand notices were issued only for balance interest, but the record did not clearly show whether any underlying tax liability survived or whether the difference between the return and the demand exceeded the statutory threshold. Since the factual basis necessary for applying section 22 was unclear, further verification by the assessing authority was required.

Conclusion: The remaining writ petitions were remanded to the Superintendent of Taxes for fresh consideration in accordance with law.

Final Conclusion: The challenge succeeded in part on the issue of interest liability after reassessment, while the remaining matters were sent back for factual determination before any fresh levy could be sustained.

Ratio Decidendi: Interest under the sales tax provision is chargeable only where there is an enforceable unpaid tax liability, and if fresh assessment results in nil demand, no interest can be levied; where the factual basis of demand is unclear, the matter must be verified before levy.

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