1989 (1) TMI 65

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....late Tribunal, Gauhati Bench, Gauhati, has referred the following question of law for our decision "Whether, on the facts and in the circumstances of the case, interest paid under section 35A of the Assam Sales Tax Act, 1947, for delay in payment of sales tax was allowable as deduction under section 37 of the Income-tax Act, on the ground that it was not penal in nature ?" We have heard Shri Cho....

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..... We may next refer to Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429, wherein the Supreme Court was called upon to decide the nature of the interest payable under section 3(3) of the U. P. Sugarcane Cess Act, 1956. Under that section any arrear of cess not paid on the date prescribed carried interest at the rate of 6% per annum from such date to the date of payment. As to this type of int....

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....uch as under section 35A of the Assam Sales Tax Act, 1947, any default in paying the full amount of tax carries with it interest and the enlargement of the tax liability is automatic. It has also been brought to our notice by Shri Saraf that there is a separate provision under section 38 of the Sales Tax Act for levying penalty where the return is not submitted in due time. It is contended by lear....