Interest Calculation Dispute Under Section 50 of CGST Act Resolved Through Court-Ordered Consensus Approach

The HC set aside an order demanding interest under Section 50 of CGST Act for July 2017-September 2021. The petitioner acknowledged tax liability but disputed the interest calculation. After noting the parties' differing calculations, the court directed the petitioner to appear before the respondent on a specified date to reach consensus on proper quantification. The court ordered a fresh demand to be issued based on these discussions within a specified timeframe. The petition was allowed without costs.

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Issues:
1. Challenge to demand of interest under Section 50 of the CGST Act, 2017 for the period July 2017 to September 2021.

Detailed Analysis:
The petitioner sought a writ of certiorari challenging an order demanding interest under Section 50 of the CGST Act, 2017 for the period from July 2017 to September 2021. The petitioner acknowledged some liability towards IGST, CGST, and SGST but disputed the quantification of interest by the authority. The petitioner promptly wrote to the respondent regarding this matter, expressing concerns about the demand raised for a period dating back to 2017 and requesting time to review the computation provided. Additionally, the petitioner submitted a statement of accounts outlining its own quantification of the taxes in question.

The petitioner, fearing potential recovery actions due to the lack of response to their request for a personal hearing, filed a Writ Petition challenging the quantification of interest in the impugned order. Recognizing that the remaining issue was the accurate quantification of the demand based on differing calculations between the Department and the petitioner, the court directed the petitioner to appear before the respondent without further notice on a specified date to discuss and agree on a proper quantification of the demand. The court emphasized the importance of the parties reaching a consensus on the quantification to facilitate the issuance of a fresh demand for the interest payable.

Consequently, the impugned order was set aside, and it was instructed to be redone based on the discussions between the parties within a specific timeframe. The Writ Petition was allowed with no costs imposed, and the connected Miscellaneous Petition was closed, concluding the legal proceedings on the matter.

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