Nil tax demand bars statutory interest; prior binding reassessment ruling controls later proceedings under Assam sales tax law.

Where reassessment under the Assam General Sales Tax Act, 1993 leaves no tax payable, statutory interest cannot be levied on a nil demand. The Gauhati High Court noted that an earlier Division Bench had already held, on substantially identical facts, that interest is not recoverable once reassessment results in no balance tax due, and that binding determination had to be followed in later proceedings. Orders imposing interest after the de novo assessment were therefore unsustainable because Section 22 could not be invoked when no tax remained outstanding. The writ petitions succeeded and the interest demands were set aside.

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Issues: Whether interest could be levied under the Assam General Sales Tax Act, 1993 after reassessment when no tax demand survived and whether the earlier Division Bench determination on the same factual and legal matrix was binding.

Analysis: The assessment records showed that after the Supreme Court's remand and the subsequent de novo exercise, the balance tax demand was nil. The earlier Division Bench had already held, on substantially identical facts, that where reassessment results in nil demand, no interest can be levied. The Court also noted that the subsequent assessment and appellate orders could not be sustained if they travelled beyond that binding determination. Section 22 of the Assam General Sales Tax Act, 1993 was examined in this context, but its interest provisions were held inapplicable once no tax remained due.

Conclusion: Interest was not leviable on a nil demand, and the impugned orders imposing interest could not be sustained. The issue was decided in favour of the assessee.

Final Conclusion: The writ petitions succeeded and the tax authorities' interest demands were set aside, with the parties left to bear their own costs.

Ratio Decidendi: Where reassessment leaves no tax payable, statutory interest provisions cannot be invoked to impose interest, and a prior binding decision on the same factual and legal issue must be followed in subsequent proceedings.

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