Orissa HC lifts Bank Attachment for Payment of Interest on Delayed Payment of Admitted Tax [Read Order]

The division bench of Orissa High Court has lifted bank attachment for payment of Interest on delayed payment of admitted tax.

The petitioner, M/s. Orissa Stevedores Ltd. made a late deposit of admitted tax. The authority on verifying the self-assessed returns found that though there was a late tax payment, interest was not paid. Therefore, the Deputy Commissioner of Sales Tax, referring to provisions under Section 50 passed the assessment order under Section 75(12) of the OGST Act.

The assessee filed an appeal before the first appellate authority, but it found that the assessee has not paid and furnished the proof of payment which is a mandatory pre-deposit of interest in full as per provision of Section 107(6) (a) of the OGST Act, 2017 and rejected the appeal. Hence, approached the High Court for a grant of stay of recovery of demand of interest calculated on delayed payment of admitted tax.

Section 50(1) makes it abundantly clear that interest has to be computed by the taxpayer “on his own”. Needless to point out that the scheme of GST statute envisages a mechanism for self-assessment and it is well within the knowledge of taxpayers that the time limit within which it has to discharge its tax liability. In the event of a delay, it is required to compute its liability concerning interest by the notification issued by a competent authority specifying the rate of interest. Therefore, it is clear that the liability to pay interest under Section 50 is not only self-imposed but also automatic without any requirement for determination by any other.

The Coram of Mr. Justice Jaswant Singh and Mr. Justice M.S. Raman after considering the reconciliation statements has allowed the prayer of the appellant’s counsel prayer for lifting forthwith the attachment on the Bank to enable it to deposit Rs.5,00,00,000/-(rupees five crores only) within 48 hours and the Petitioner undertakes to deposit rest of the amount out of Rs.9,25,43,693.52 in two equated fortnightly installments but not later than 16th August 2022.

Adv. Mr. Jagabandhu Sahoo and Mr. Sunil Mishra appeared on behalf of the petitioner and the respondent respectively.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.