Amended interest rate on excess advance tax applies to the full payable period when assessment is completed after amendment.

Interest on excess advance tax under section 214(1) accrues only when assessment is completed, because that is when the Government's liability and the assessee's corresponding right can be determined. The amended rate of 9 per cent. in force on the date of assessment therefore governed the whole period for which interest was payable, including 1 April 1967 to 30 September 1967. Applying the amended provision to that earlier period was not treated as retrospective operation, as the operative event was the post-amendment assessment and the section contained no saving clause preserving the earlier rate.

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Issues: Whether the increased rate of interest under section 214(1) of the Income-tax Act, 1961, as amended with effect from 1 October 1967, applied to the entire period from 1 April 1967 to 30 September 1967 in computing interest on excess advance tax paid.

Analysis: The liability of the Government to pay interest and the corresponding right of the assessee arise only on completion of the assessment, when it becomes possible to determine whether advance tax paid exceeds the tax ultimately assessed. The provision in force on the date of assessment governs the interest payable on the excess amount. After 1 October 1967, section 214(1) stood amended to provide interest at 9 per cent., and the section did not contain any saving clause restricting the earlier period to 6 per cent. By contrast, the amendment to section 18A(5) of the Indian Income-tax Act, 1922, expressly differentiated between the pre-amendment and post-amendment periods, showing that such a distinction would have been made if intended here. Applying the amended provision to a period antecedent to its commencement did not amount to giving it retrospective effect, because the operative event was the completion of the assessment after the amendment came into force.

Conclusion: The increased rate of 9 per cent. applied to the entire period for which interest was payable, including 1 April 1967 to 30 September 1967, and the question was answered in the affirmative in favour of the assessee.

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