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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether interest was payable on delayed employees' state insurance contribution and whether any compromise or statement before the Employees' State Insurance Court could waive the statutory liability.
Analysis: Section 39 of the Employees State Insurance Act, 1948, together with Regulations 31 and 31A, makes interest payable automatically where contribution is not paid within the prescribed time. The liability is statutory and arises on default or delay in payment. Since the statute contains no power of waiver, the parties could not by compromise or by a statement recorded in the proceedings extinguish the interest liability. The reference in the order of the Employees' State Insurance Court to there being no further amount due related only to the contribution amount and not to the statutory interest. The demand for interest, therefore, remained enforceable.
Conclusion: The interest demand was valid and could not be waived by compromise or consent.
Final Conclusion: The challenge to the demand for interest failed, and the statutory liability to pay interest was upheld.
Ratio Decidendi: Where a statute mandates interest on delayed payment of contribution, the liability is automatic and cannot be waived by private compromise or a statement made in proceedings unless the statute itself permits such waiver.
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