Statutory Interest under GST must be computed and reasoned per statutory method, with orders remitted for fresh determination.

Orders reducing statutory interest under the Central Goods and Services Tax Act were found to lack recorded reasons and a demonstrated method of calculation required by Section 56; the court declined to recalculate but held the authorities must apply the statutory rate and prescribed manner and directed a fresh determination after hearing the petitioner within 30 days. The impugned interest determinations are set aside and remitted for reconsideration strictly in accordance with Section 56 and the binding directions of the court, producing a result favourable to the assessee on the interest issue.

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Issues: Whether the impugned orders granting reduced interest complied with Section 56 of the Central Goods and Services Tax Act, 2017 in the calculation and grant of statutory interest, and whether those orders should be set aside and a fresh determination of interest directed.

Analysis: The petition challenged the computation and reduction of interest awarded by the departmental orders, alleging non-compliance with the statutory rates and method under Section 56 of the Central Goods and Services Tax Act, 2017. The impugned orders do not record reasons or demonstrate the basis for the reduced interest or the method of calculation in terms of the statutory mandate. The Court declined to substitute its own calculations but examined whether the authorities applied the correct statutory framework. Observing that the statutory provision prescribes the manner and rate for grant of interest and that binding principles on calculation exist, the Court found that the orders failed to show application of Section 56 and directed the designated officer to undertake a fresh exercise of determination strictly in accordance with Section 56 and the binding directions of this Court, after hearing the petitioner within 30 days.

Conclusion: The impugned orders insofar as they determine the interest amounts are set aside and the matter is remanded for fresh determination of interest strictly in accordance with Section 56 of the Central Goods and Services Tax Act, 2017; this conclusion is in favour of the assessee.

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