2001 (6) TMI 798
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....0. It is stated that that amount was paid. The Board took up the matter in appeal. The Tribunal, by exhibit P4 order, set aside the appellate order and restored exhibit P1 assessment order of the original authority. Consequentially, exhibit P5 demand was issued. While issuing the demand, penal interest under section 23(3) of the Act was also demanded. Section 23(3) of the Act is as follows: "(3) If the tax or any other amount assessed or due under this Act is not paid by any dealer or other person within the time prescribed therefor in this Act or in any rule made thereunder and in other cases within the time specified therefor in the notice of demand the dealer or other person shall pay, by way of interest, in the manner prescribed, in ad....
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....ere. The Supreme Court in Maruti Wire Industries Pvt. Ltd. v. Sales Tax Officer, First Circle, Mattancherry [2001] 122 STC 410; (2001) 3 SCC 735 held that penal interest can be demanded under section 23(3) only when there was unpaid tax due or payable on the basis of a return as per self-assessment or by assessment order or appellate/revisional order. The Supreme Court in Income-tax Officer v. Seghu Buchiah Setty [1964] 52 ITR 538; AIR 1964 SC 1473 held that if an order of assessment is restored or replaced by the appellate order, then notice of demand and all other steps based upon the original order must be deemed to have become ineffective. While considering an identical matter, this Court held in K. Nachimuthu v. Sales Tax Officer [1994....