Levy and calculation of interest

(1)

1. (a) Where any Registered dealer or any person has furnished returns, whether within the prescribed time or not, but has not paid the tax due as per the said returns either fully or partially, then he shall be liable to pay interest on the amount of tax due as per the returns at the rate of two per cent, per month from the date by which he was required to furnish the returns by or under the provisions of this Act, upto the date of payment ;
2. (b) where any Registered dealer or any person has furnished a revised return, whether within the prescribed time or not, which revised return shows that a larger amount of tax than already paid is payable and has not paid the tax due (either fully or partially), per the revised return, then such dealer or person shall be liable to pay interest also on the difference between the amount of tax due as per the revised return and that shown as payable in the original return, at the rate of two per cent per month from the expiry of three months next following the last date prescribed for furnishing the original return upto the date of payment;
3. (c) where any Registered dealer is required to pay tax without furnishing returns for any period by or under the provisions of this Act and such tax is not paid by the due date, then such dealer shall be liable to pay interest on such amount of tax at such rates and for such periods as provided in clause (a) of this sub-section, as if such dealer was required to furnish returns by such due date ;
4. (d) where any Registered dealer or any person required to furnish returns pays tax for any period without furnishing the returns, the tax so paid shall be divided proportionately amongst the periods for which he was required by or under the provisions of this Act to pay but has failed to pay the same and the amount so determined shall be deemed to be the amount of tax payable for such period and the dealer shall be liable to pay interest at two per cent. per month on the aforesaid amount from the date from which the tax was due for such period or under the provisions of this Act to the date of payment : Provided that, where any such dealer shows to the satisfaction of the Commissioner that the whole or any part of the amount of tax paid is attributable to any particular period, then he shall be liable to pay interest on such amount at two per cent per month from the date from which the tax for the said period was due and payable by or under the provisions of this Act to the date of payment ;
5. (e) where the liability to pay tax is quantified in respect of a dealer or any person,—
   • (i) who has failed to furnish returns for the whole of the period for which the tax is quantified;
   • (ii) who has failed to furnish returns for any part of the period for which the tax is quantified ; then, in respect of category (ii), the difference between the tax quantified and the tax shown as payable in the returns and in respect of category (i), the difference between the tax quantified and the tax paid, shall be divided proportionately amongst the periods for which he was required to furnish the returns by or under the provisions of this Act but has failed to furnish such returns, and the amount so determined shall be deemed to be the amount of tax payable for each period and the dealer shall be liable to pay interest at the rate of two per cent. per month on the aforesaid amount from the date by which he was required to furnish such returns upto the date of quantification : Provided that, where the Commissioner is satisfied that the whole or any part of the balance of tax found due or liability to pay tax quantified is attributable to any particular period, then the dealer shall be liable to pay interest on such amount at the rate of two per cent. per month from the date by which he was required to furnish the return for the said period by or under the provisions of this Act to the date of quantification ; Explanation.—The expression “liability to pay tax is quantified” in this clause means determination of the tax liability under section 44, 46, 47, 49 or 85 of this Act;
6. (f) the rate of interest payable under clauses (a),
7. (b) and (e) shall be at the reduced rate of one per cent. where the registered dealer or any person has admitted tax liability and where he is allowed to pay the admitted tax liability in instalments under the provisions of sub-section (5) of section 53 : Provided that, the reduced rate of one per cent. shall, in the case of grant of instalments, apply with effect from the date of receipt of application made by the dealer in this behalf : Provided further that, if such dealer or the person fails to make payment of any of the instalments or fails to abide by any of the conditions, if any, subject to which permission to pay the tax in instalments was granted, the rate of interest shall be two per cent. per month;
8. (g) the interest payable under clauses (a),
9. (b) and (c) of this sub-section shall not be charged for a period exceeding 36 months from the end of the year in respect of which the dealer or the person has failed to pay the tax.

1. (2) Where any amount of tax or amount forfeited is demanded from a dealer or a person as a result of an order passed in any proceedings under this Act (including the assessment, re-assessment, appeal, revision, rectification or otherwise) and such tax or amount forfeited is not paid by such dealer or person within the time as required by or under the provisions of this Act to pay, then he shall be liable to pay interest at the rate of two per cent. per month on the amount of tax or amount forfeited from the date of such order till the date of payment of such amount.
2. (3) The Commissioner may, subject to such conditions as may be prescribed, remit the whole or any part of the interest payable in respect of any period.