1997 (12) TMI 16 - SUPREME COURT

High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature - in view of decision in cases of Saraya Sugar Mills Pvt. Ltd. v. CIT and Triveni Engineering Works Ltd. v. CIT, appeal is allowed and held that interest on the outstanding balance of sales tax was an allowable deduction, assessee's claim in respect of interest on the arrears of sales tax is also acceptable