Judgment :- Petitioner, who is stationed in Patna, entered into an agreement with M/s. Tata Oil Mills Co. Ltd. to supply imported inedible tallow to their factory at Ernakulam, one of the conditions of the supply being that the tax payable in respect of the transaction will. be on purchaser's account. The goods were delivered through the Cochin Port in April 1983. The price paid for the supply was Rs. 1,13,36,094/-. 2. The petitioner had not been registered as a dealer under the Kerala General Sales Tax Act, 1983 (the act ) nor their letter of authority holder, one Garuda International. The petitioner did not file any return of the" turnover relating to the above transaction, for the alleged reason that the sale was in the course of import. The first respondent assessing authority however thought otherwise. After issuing notices to the petitioner and Garuda International, the details of which it is unnecessary to recite, the first respondent completed an assessment Ext. P4 dated 10-10-1984 on the petitioner making it liable for a tax of Rs. 4,98,788/- and surcharge of Rs. 36,275-52. This order was served on the petitioner on 4-3-1985 with notices of demand Exts. P2 and P3 for tax and surcharge directing payment of the amounts within thirty days. The service of Exts. P1, P2 and P3 on 4-3-1985 is evident from the postal cover Ext. P4. On service of these notices, M/s. Tata Oil Mills paid an amount of Rs. Two lakhs on 30-3-1985 and another amount of Rs. 3,68,571-36 on 17-5-1985 - the aggregate payment thus' made being in excess by Rs.33,50/- 44 of the demands covered by Exts. P2 and P3. 3. The petitioner was thereafter served with two notices Exts. P5 and P6 for payment of Rs. 1,85,882-58 as penal interest under S.23(3) of the Act. The counter affidavit explains the demand as the interest due from 20-5-1983 to 25-2-1985, the petitioner being obliged by R.21(7) of the Kerala General Sales Tax Rules, 1963 to file return of his turnover for April 19 8 3 on or before 20-5 -19 8 3 along with proof of pay ment of the tax due for the month. The petitioner having defaulted in this obligation, was bound to pay penal interest from 20-5-1983 till date of payment. This was the amount demanded as per Exts. P5 and P6. 4. The petitioner having defaulted in this obligation, was bound to pay penal interest from 20-5-1983 till date of payment. This was the amount demanded as per Exts. P5 and P6. 4. Petitioner challenges the demand with the contention that the amount of tax was payable only after service of the order of assessment and the notices of demand namely Exts. P1 to P3 and the expiry of the period of time fixed in Exts. P2 and P3 for payment. Part of the amount namely Rs.2 lakhs was paid within the said period and the balance on 17-5-1985. Penal interest was thus payable only on the balance outstanding on 4-4-1985 at 1 % for the two months April and May 1985. The rest of the demand is illegal. 5. Government Pleader for the respondents however sustains the demand with the plea mentioned in the counter affidavit, that the petitioner had to file its return supported by proof of payment of tax due on 20-5-1983 and since it had defaulted in doing so, it had to pay penal interest on the amount due from that date. It is inter alia pointed out that the petitioner had no quarrel about the assessment when it was eventually completed and that the amounts due were paid without demur in two instalments. The learned Government Pleader places reliance on the decision of the Full Bench in Abdulla v. Sales Tax Officer, 1992(1) KLT 658 =1992 KLJ (Tax Cases) 259, where it was held that where tax became due on self assessment on the filing of the return, a further notice of demand for the tax was unnecessary and irrelevant and the liability for penal interest attached itself on the filing of the return. The position, says the Government Pleader, is no different when no return is filed as the liability for penal interest attached itself from the due date for filing of the return. 6. Section 23(3) casts a liability for penal interest if default is committed in payment of the tax assessed within the time prescribed therefor in the Act or in the Rules. The liability is for default in payment of the tax assessed. The Full Bench has interpreted the provision to include a self-assessment also consequent on a return filed by the assessee in which event, no demand is required for payment of the tax. The liability is for default in payment of the tax assessed. The Full Bench has interpreted the provision to include a self-assessment also consequent on a return filed by the assessee in which event, no demand is required for payment of the tax. An assessment either self or statutorily made by the concerned officer is necessary to cast the liability for penal interest. When no return is filed and no admission of liability to tax is made, it cannot be deemed fictionally that an assessment has been made on the date on which the return ought to have been filed. The Full Bench has not laid down any such proposition as contended by the learned Government Pleader. The cases dealt with by the Full Bench were ones in which there was default in payment of amounts collected as tax by the dealers concerned. It was in those circumstances that the Full Bench held that the tax was due on self assessment and the dealers liable for penal interest. 7. It is no doubt true that the petitioner was bound by R.21(7) to submit a return and pay the tax due on or before 20-5 -1983. It is also true that liability for penal interest is attracted once there is an assessment including a self-assessment. But there should be an assessment, self (by the filing of return) or otherwise. There was no self assessment in this case and the assessment giving rise to the demand and the liability for penal interest was served only on 4-3-1985. The decision in Abdulla does not therefore come to the rescue of the respondents. 8. This view no doubt leads to a position where an assessee who files a return but does not pay the tax becomes liable for the penal interest; whereas an assessee who does not file the return at all escapes penal interest. But it must be noted that the assessee in the latter case gets exposed to very severe penalty under S.45A(1)(c) which may be as high as twice the amount of the tax involved. It may also happen that the failure to file the return was because of a bona fide belief that no tax was leviable under the Act. The position is not therefore that anomalous as appeared at first sight. 9. It may also happen that the failure to file the return was because of a bona fide belief that no tax was leviable under the Act. The position is not therefore that anomalous as appeared at first sight. 9. The decision in Gursahai Saigal v. Commissioner of Income Tax, (1963) 48 ITR 1 (SC) on which the learned Government Pleader relied related to section 18 A of the Income Tax Act, 1922. The Supreme Court read the expression "in which the tax was paid" in sub-section (6) as "in which the tax ought to have been paid" having regard to the anomalous situation that would otherwise arise on a literal interpretation of the sub-section. No such situation arises here as I have pointed out in the preceding paragraph. 10. In this view of the matter, the demand for penal interest under Exts. P5 and P6 is not justified. The petitioner is liable for the interest under S.23(3) only for the period from 4-4-1985, on the amount outstanding on that date. The original petition is therefore allowed. Exts. P5 and P6 are quashed. The first respondent is directed to confine the recovery of penal interest to the amount payable under S.23(3) on the tax outstanding on 4-4-1985 for the subsequent period. There will be no order as to costs.