Deferred sales tax interest must run from repayment default under the scheme's certificate and clarification, with fresh computation required.

Under a sales tax deferral scheme with distinct deferral and repayment periods, interest for default during the repayment stage must be computed from the date of default in repayment, not mechanically from the original deferral period. The eligibility certificate, agreement, and 2014 departmental clarification had to be read together, and the authority was required to apply that clarification to each assessment year before fixing liability. The impugned demand was not sustained in its existing form and the matter was remanded for fresh computation of interest in accordance with the governing documents.

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Issues: Whether interest on deferred sales tax was liable to be computed from the original deferral period or from the respective due dates of repayment under the eligibility certificate and connected clarification, and whether the impugned demand required interference.

Analysis: The dispute concerned delayed repayment under a deferral scheme governed by the eligibility certificate and the departmental clarification issued in 2014. The relevant scheme contemplated two stages, namely the deferral period and the repayment period. The certificate and agreement provided for recovery of tax and interest upon default, but the clarification stated that where default occurs during the repayment tenure, interest is to run from the date of default in payment of dues. The petitioner had delayed repayment, and the Court accepted that interest could not be applied mechanically from the earliest date claimed by the department without applying the clarification to the facts of each assessment year.

Conclusion: The matter was remanded to the authority to apply the departmental clarification to each default and requantify the interest payable by the petitioner.

Ratio Decidendi: In a deferral scheme with distinct availing and repayment periods, interest for default during the repayment period must be computed from the date of default in repayment, and the demand must be aligned with the governing certificate and clarification.

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