Admitted tax and set-off disallowance under the U.P. Trade Tax Act attract interest under section 8(1), not section 8(1-B).

Where turnover and the applicable tax rate are admitted, and the only dispute concerns partial disallowance of a set-off claim under section 4-BB of the U.P. Trade Tax Act, the unpaid balance is treated as "tax admittedly payable" under the explanation to section 8(1). Interest is therefore chargeable under section 8(1) when no bona fide dispute survives on liability or rate, and the contrary view confining interest to section 8(1-B) is not sustainable.

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Issues: Whether the shortfall in tax resulting from disallowance of part of the set-off claim under section 4-BB of the U.P. Trade Tax Act constituted "tax admittedly payable" so as to attract interest under section 8(1), or whether interest was confined to section 8(1-B).

Analysis: The assessee had disclosed its turnover and the applicable rate of tax in its accounts, and there was no dispute regarding classification of goods or the rate of tax. The controversy was limited to the extent of set-off admissible on raw materials under section 4-BB. Since the assessee accepted the partial disallowance of set-off and no bona fide dispute survived on the admitted turnover and tax rate, the unpaid amount formed part of the tax admittedly payable within the explanation to section 8(1). The Court distinguished decisions where liability itself, or the applicable rate, was disputed from the outset.

Conclusion: The shortfall was rightly treated as admitted tax and interest under section 8(1) was payable; the contrary view under section 8(1-B) was not sustainable.

Ratio Decidendi: Where turnover and tax rate are admitted and only a set-off claim is disallowed or accepted without surviving dispute, the unpaid balance is "tax admittedly payable" attracting interest under section 8(1) of the U.P. Trade Tax Act.

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