HC dismisses writ petition challenging GST interest demands on delayed payments, directs petitioner to statutory appeal under Section 107

The HC dismissed the writ petition challenging interest demands on delayed GST payments. The petitioner paid taxes late ranging from 7 to 196 days beyond the statutory due date of 20th of next month, making interest liability mandatory at maximum 18%. The court held that impugned demands constituted appealable decisions under Section 107 of the GST Act, requiring appeal within three months rather than writ jurisdiction. Since orders were passed on 05.01.2022, petitioner still had time to file statutory appeal. Petition dismissed with liberty to pursue remedy through proper appellate forum within limitation period.

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Issues Involved:
- Writ of Certiorarified Mandamus for belated payment of tax demand interest
- Interpretation of Section 50 of the TNGST Act, 2017
- Freezing of petitioner's bank accounts
- Maintainability of the writ petitions

Analysis:

Writ of Certiorarified Mandamus for Belated Payment of Tax Demand Interest:
The petitioner sought a writ of Certiorarified Mandamus to challenge the demand for interest on belated tax payments issued by the Revenue. The petitioner argued that the date of credit to the Government's account should be considered as the date of tax payment, not the filing date of GSTR-3B returns. The petitioner contended that the demand notices were flawed as they did not consider the actual payment dates. The Revenue justified the demands based on delayed payments and highlighted that interest is statutory and can be recovered. The Court examined the due dates and actual payment dates for each month, emphasizing the statutory requirement under Section 50 of the Act for interest on belated tax payments.

Interpretation of Section 50 of the TNGST Act, 2017:
Section 50 mandates interest payment for delayed tax payments, with a maximum rate of 18%. The Court clarified that the taxpayer is obligated to pay interest for belated tax payments. The petitioner's argument regarding the date of credit to the Government's account was considered, but the Court emphasized that factual disputes should be addressed by the Appellate Authority. The Court highlighted the availability of the appeal remedy under Section 107 of the Act for challenging such decisions.

Freezing of Petitioner's Bank Accounts:
The petitioner's counsel raised concerns over the freezing of the petitioner's bank accounts due to the impugned demands. The petitioner's business was adversely affected by the account freeze. However, the Court did not delve into the freezing issue extensively, focusing more on the legality of the demand notices and the appeal process.

Maintainability of the Writ Petitions:
The Government Advocate argued that the petitioner should have pursued the appeal process under Section 107 of the Act before approaching the Court with writ petitions. The Court agreed that factual matters regarding tax payments should be addressed through the appellate route. The Court dismissed the writ petitions but granted the petitioner liberty to file an appeal within the statutory limitation period.

In conclusion, the Court dismissed the writ petitions, emphasizing the importance of utilizing the appeal mechanism provided under the law for challenging tax-related decisions. The judgment highlighted the statutory requirements for interest on belated tax payments and the need to address factual disputes through the appropriate appellate channels.

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