Retrospective GST interest proviso: Bihar HC remits Section 50 levy for fresh consideration under amended law.

Retrospective insertion of the proviso to Section 50 of the Bihar GST Act by the 2021 amendment, effective from 1 July 2017, required the interest levy for the 2017-18 period to be re-examined under the substituted proviso and any relevant circulars. The High Court therefore set aside the impugned interest demand and remitted the matter to the Assessing Officer for fresh consideration after notice to the taxpayer, leaving the demand not finally sustained.

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Issues: Whether interest under Section 50 of the Bihar Goods and Services Tax Act, 2017 could be sustained for the assessment year 2017-18 in view of the proviso inserted by the Bihar Goods and Services Tax (Amendment) Act, 2021 with retrospective effect from 1 July 2017.

Analysis: The amendment substituted the proviso to Section 50 with effect from 1 July 2017, thereby covering the relevant assessment year. In view of the retrospective amendment, the issue of levy of interest required fresh consideration on the basis of the substituted proviso and any relevant circulars. The impugned order was therefore set aside for reconsideration by the Assessing Officer after notice to the petitioner.

Conclusion: The interest demand was not finally upheld and the matter was remitted to the Assessing Officer for reconsideration, which is in favour of the assessee to that extent.

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