Interest cannot be levied on disputed sales tax treated as exempt, since it is not admitted tax.

Interest under the U. P. Sales Tax Act was not leviable on disputed turnover where the dealer had claimed exemption and the tax demand was therefore not admitted tax. The Court noted that no finding had been recorded on the taxability of the disputed transactions under Section 3-D, so that issue was not determined. On the interest question, it held that tax demanded on exempted or disputed turnover cannot be treated as admitted tax for the purpose of Section 8(1). The Tribunal's view that the interest demand was unsustainable was consistent with law, and the revision petitions failed on this issue.

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Issues: Whether interest could be levied under the U. P. Sales Tax Act on amounts of tax relating to disputed transactions for which the dealer had claimed exemption and the tax was not admitted tax.

Analysis: The Tribunal had not recorded any finding on the taxability of the disputed transactions under Section 3-D of the U. P. Sales Tax Act, and the challenge to that aspect did not arise for determination. On the question of interest, the Court held that where the dealer was claiming exemption in respect of the disputed turnover, the tax demanded on such turnover could not be treated as admitted tax. In such a situation, interest under Section 8(1) of the U. P. Sales Tax Act was not leviable. The Tribunal's view that the interest demand was unsustainable was therefore consistent with law.

Conclusion: Interest under Section 8 of the U. P. Sales Tax Act was not leviable on the disputed turnover claimed as exempt, and the revision petitions failed on this issue.

Ratio Decidendi: Interest cannot be charged under the sales tax law on disputed tax liability that is not admitted tax, particularly where the dealer has claimed exemption on the turnover concerned.

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