Differential tax liability and consequential interest upheld, while penalty proceedings were remitted for fresh consideration.

Unpaid differential tax remained recoverable, and belated payment attracted consequential interest, with credit to be given for amounts already paid under the interim order and in connected appellate proceedings. The penalty component was not finally sustained and was remitted for fresh consideration on merits and in accordance with law within the stipulated time, with scope to drop the penalty if the GST Council recommendation is implemented. The writ petition was disposed of with directions on tax and interest payment while leaving penalty proceedings open for reconsideration.

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Issues: (i) Whether the petitioner was liable to pay the unpaid differential tax and consequential interest arising from belated payment of tax; (ii) Whether the penalty proceedings required fresh consideration.

Issue (i): Liability to pay the outstanding tax and interest was examined in the light of the amounts already paid and the balance remaining unpaid. The delayed payment of tax was treated as attracting interest, and the petitioner was directed to discharge the differential tax and the balance interest, after giving credit for any payments already made under the interim order and in the connected appellate proceedings.

Conclusion: The petitioner was held liable to pay the unpaid differential tax and consequential interest.

Issue (ii): The penalty component was not finally sustained on merits. The matter was left for a fresh order on merits and in accordance with law within the stipulated time, with a further indication that the penalty may be dropped if the GST Council recommendation is implemented.

Conclusion: The penalty issue was remitted for fresh consideration.

Final Conclusion: The writ petition was disposed of with directions to pay the unpaid tax and interest, while the penalty proceedings were left open for reconsideration.

Ratio Decidendi: Where tax remains unpaid, interest follows as a consequential liability, and the penalty component may be separately reconsidered in light of subsequent administrative or policy developments.

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