1995 (4) TMI 104

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....s not accepted but contested by the assessee. " 2. The facts, briefly stated, are that the State Electricity Board had raised a demand on the assessee, pertaining to some earlier years. The fact that it was a statutory liability is not in dispute. The assessee contested this levy but the court held against the assessee. However, the assessee took some time to pay the demand so crystallised and hence was charged interest of Rs. 79,003 for the delayed payment. The interest remained unpaid at the year end but made a provision thereof in the accounts and debited the sum to electricity power account. As the same had not been paid in the accounting year relevant to the assessment year under appeal, the Assessing Officer disallowed the same and a....

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....very first instance, we are unable to agree with the contentions made on behalf of the assessee. The jurisdictional High Court, in the case of CIT v. Udaipur Distillery [1986] 160 ITR 444 (Raj.) has clearly held that the liability of interest on delayed payment of sales-tax is a statutory obligation of the dealer and hence is a part of sales-tax. The Hon'ble High Court had based its decision following the rulings of the Hon'ble Supreme Court in several cases and in particular in the case of Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429 and that in the case of Haji Lal Mohd. Biri Works v. State of U.P. [1973] 32 STC 496. 8. At this juncture, it would be interesting to note that Shri Kalia also relied on the judgment of the Hon'ble S....