7A. [ Charge on the property of defaulter and levy of interest for delayed payment of tax. [Section 7-A and 7-B inserted by the Amendment Act 20 of 2006.]
(1)If a proprietor or a person does not pay the tax within the time he is required by or under the provisions of this Act and the rules made thereunder to pay it, then,-(i)the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act; and(ii)the proprietor or person shall be liable to pay by way of simple interest, in addition to the amount of such tax, an amount equal to simple interest @ 15% per annum on such tax.Explanation. - For the purpose of clause (ii) above, for calculating the interest, the fraction of the month shall be treated as a full month.(2)If any tax, other than the tax on which interest is leviable under sub-section (1), has remained unpaid on the date prescribed for filing the last returns in respect of any period of assessment, then, the proprietor or person shall be liable to pay by way of simple interest, a sum equal to two percent on such tax for each month or part thereof on the expiry of 30 days from the date immediately following the date on which the period for which the proprietor or the person has been assessed expires, till the date of order of assessment and where any payment of such unpaid tax, whether in full or in part, is made on or before the date of order of assessment, the amount of such interest shall be calculated by taking into consideration the amount and the date of such payment. If, as a result of any order passed under this Act, the amount of tax which had so remained unpaid is enhanced or reduced, as the case may be, the interest shall be enhanced or reduced, accordingly.(3)Notwithstanding anything contained in sub-section (1), 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 by any proprietor or person or class of persons.
