Deferred sales tax interest depends on compliance with repayment terms; self-assessment liability does not require a separate assessment order.

Deferred sales tax under the Tamil Nadu General Sales Tax Act, 1959 remains subject to the terms of the deferral agreement, and interest is not excluded once the dealer fails to satisfy the repayment conditions. The Court explained that Section 17-A protects the assessee from interest only during the valid deferral period, while Section 24(3) makes interest payable after default. It further noted that tax liability arises through the return-based self-assessment mechanism under Section 13 and does not depend on a separate assessment order. Sickness proceedings and the absence of an assessment order therefore did not, by themselves, create a legal right to waiver of interest.

---

---

Issues: Whether the petitioner was entitled as of right to waiver of interest on the deferred sales tax amount on the ground that it had become a sick company and that no assessment order had been passed.

Analysis: The deferral scheme under Section 17-A of the Tamil Nadu General Sales Tax Act, 1959 grants postponement of tax payment subject to the conditions in the deferral agreement. Under Section 17-A(2), interest is not attracted during the deferral period only if the conditions for payment of the deferred tax are satisfied. Once the petitioner failed to comply with the repayment terms, the statutory protection ceased and interest under Section 24(3) became payable. The Court also held that tax liability under the Act arises from the return-based self-assessment mechanism under Section 13 and does not depend on a separate assessment order. The petitioner's reliance on sickness proceedings and the absence of assessment did not create a legal entitlement to waiver of interest.

Conclusion: The petitioner had no enforceable right to a complete or partial waiver of interest as a matter of law, though the Court directed reconsideration of the claim by a special committee and kept the distraint order in abeyance pending such decision.

---