Advance surtax interest applies even on a nil estimate when statutory payment falls below the prescribed threshold.

Interest under section 7C of the Companies (Profits) Surtax Act, 1964 was leviable where the assessee filed a nil estimate and paid no advance surtax, because section 7A required advance payment on the basis of the assessee's own estimate and section 7C applied whenever advance surtax fell below eighty-three and one-third per cent of the assessed surtax. The court held that complete non-payment did not take the case outside the statutory interest provision, as the scheme was designed to ensure compliance with the prescribed advance-tax threshold. The levy was therefore upheld and the issue was answered against the assessee and in favour of the Revenue.

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Issues: Whether interest under section 7C of the Companies (Profits) Surtax Act, 1964 was leviable where the assessee filed only a nil estimate and did not pay advance surtax, and whether the levy was justified on the facts of the case.

Analysis: Section 7A of the Companies (Profits) Surtax Act, 1964 required advance payment of surtax on the basis of the assessee's own estimate. Section 7C provided for interest where the advance surtax paid fell short of eighty-three and one-third per cent of the assessed surtax. The Court held that the assessee could not escape liability merely because it had filed a nil estimate or paid no advance surtax at all. Such default did not take the case outside section 7C, because the statutory scheme was intended to ensure that the shortfall between advance surtax and assessed surtax did not exceed the prescribed margin.

Conclusion: Interest under section 7C was leviable, and the question was answered against the assessee and in favour of the Revenue.

Ratio Decidendi: A company that fails to pay advance surtax, including by filing a nil estimate, remains liable to interest under the surtax interest provision if the advance surtax paid is below the statutory threshold of the assessed surtax.

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