1982 (3) TMI 223 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of section 7(1-B) of the U.P. Sales Tax Act regarding the charging of interest for delayed tax payments.

The judgment of the Allahabad High Court in this case revolved around the interpretation of section 7(1-B) of the U.P. Sales Tax Act concerning the imposition of interest on delayed tax payments. The petitioner, a company with branches in U.P., faced demands for interest on delayed sales tax payments for two consecutive years. The key question was whether interest could be charged for the actual period of delay or for the entire month. The petitioner argued that interest should only apply for the actual days of delay as per section 7(1-B). The Court referred to a previous decision and held that interest at two per cent can be charged for the specific period of delay, not necessarily the entire month. In this case, delays of two and four days were noted, and the petitioner had already paid interest for the actual default period. Consequently, the Court ruled in favor of the petitioner, directing the Sales Tax Officer not to charge interest for the whole month but only for the actual days of default. The petitioner's plea was partially allowed, and the respondent was instructed to apply interest under section 7(1-B) solely for the period of actual default without any cost implications.