At the best Petitioner can seek for Instalment u/s 80 of GST': Madras HC confirms Interest on Delayed Tax Payment [Read Order]
The Court held that there was no scope for any interference either before the original authority or the appellate authority and clarified that at best, the petitioner can seek for payment of interest in installments under Section 80 of the GST Enactments Act.
The Madras High Court confirmed that the petitioner is liable to pay interest on the belated payment of tax under Section 50(1) of the respective Goods and Services Tax Enactments Act and clarified that at best, the petitioner can seek for payment of interest in installments under Section 80 of the GST Enactments Act.
Section 80 of the Tamilnadu Goods and Services Tax act reads as
“On an application filed by a taxable person, the Commissioner may, for reasons to be recorded in writing, extend the time for payment or allow payment of any amount due under this Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 50 and subject to such conditions and limitations as may be prescribed.”
Sri Vinayaka Industries (Petitioner), had previously suffered two adverse assessment orders for the tax period 2018-19 (dated 20.07.2023) and 2019-2020 (dated 09.11.2023), which the petitioner failed to contest.
The petitioner challenged these two orders which were disposed of on June 7, 2024. The High Court had set aside the impugned orders, conditioned upon the petitioner remitting 20% of the interest demand under each assessment order within two weeks.
The petitioner was also permitted to submit a reply to the show cause notice, and the respondent was directed to provide a personal hearing and issue fresh assessment orders.
Following the remand order, the petitioner was called for a personal hearing on January 10, 2025, but they failed to respond to the notice dated January 8, 2025. Consequently, the petitioner suffered a fresh adverse order dated March 11, 2025.
Aggrieved by the order, the petitioner once again filed a writ petition before the Madras High court. The current writ petition which was filed on September 19, 2025, challenged the remand order concerning the tax period 2018-2019.
The High Court Bench comprising Justice C. Saravanan, observed that the dispute pertained only to the interest under Section 50(1) of the respective GST Enactments Act. The Court held that there was no scope for any interference either before the original authority or the appellate authority.
Section 50(1) of the Tamilnadu Goods and Services Tax act reads as
“Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council.”
While dismissing the writ petition, the Court granted the petitioner the liberty to approach the respondent under Section 80 of the respective GST Enactments Act if they wished to seek payment of interest in installments. The Writ petition was dismissed. The connected Writ Miscellaneous Petition was also closed.
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