Interest on assessed sales tax cannot be levied without prior demand notice and determination of tax payable.

Interest under the Tamil Nadu General Sales Tax Act was not sustainable where the tax shown in monthly returns had been paid and no provisional assessment or demand notice had preceded payment. The Court held that even if the returns were treated as incorrect, the assessing authority had first to determine the tax payable and issue the requisite demand before interest could arise under section 24(3) read with section 9(2A). On that basis, the levy of interest for the period in question was quashed and relief was granted to the assessee.

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Issues: Whether interest could be levied for the period April 2000 to August 2000 under section 9(2A) read with section 24(3) of the Tamil Nadu General Sales Tax Act, 1959, when the tax was paid pursuant to assessment and demand after the monthly returns.

Analysis: The petitioner had filed monthly returns showing turnover, tax due, deferral claimed and the basis of entitlement. The Court noted that even if the returns were treated as incorrect, the assessing authority had to determine the tax payable and issue a demand notice before interest could be claimed. Reliance was placed on the principle that interest under section 24(3) is payable only on an amount remaining unpaid after the date specified for payment of assessed tax or tax duly made payable under the Act, and that where tax as per returns has been paid and no provisional assessment or notice of demand preceded payment, interest is not sustainable.

Conclusion: The levy of interest was held to be unsustainable and was quashed. The writ petition was allowed in favour of the assessee.

Ratio Decidendi: Interest under the Tamil Nadu General Sales Tax Act, 1959 cannot be levied for delayed payment of tax shown in returns unless the assessing authority has first determined the tax payable and issued the requisite demand for payment.

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