Instalment payment arrangement bars interest demand where the final order was complied with and left unchallenged.

A demand notice levying interest on tax arrears was found unsustainable where an earlier final order had permitted payment in instalments and the assessee had complied with that arrangement. Because the instalment order had attained finality and remained unchallenged, the liability could not be enforced in a manner contrary to that subsisting direction. The later attempt to recover interest for alleged delay was therefore held inconsistent with the operative payment schedule, and the writ petition was allowed.

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Issues: Whether the demand notice levying interest after the assessee had been permitted to pay the tax arrears in instalments under a final order was sustainable.

Analysis: The arrears had been permitted to be paid in instalments by an earlier order, and the assessee had complied with that direction. That order had not been challenged and had attained finality. In such circumstances, the later notice demanding interest on the alleged delayed payment could not stand, as the liability was sought to be enforced contrary to the subsisting instalment arrangement.

Conclusion: The demand notice levying interest was unsustainable and the writ petition was rightly allowed.

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