Delayed VAT payment attracts statutory interest despite disputed taxability where returns showed tax due and payment came late.

Interest under section 25(4) of the Goa Value Added Tax Act, 2005 was held payable where VAT shown as due in returns or a revised return was remitted only after the prescribed time; filing returns without timely payment attracted delayed-payment interest under the statutory scheme. The Bombay HC also rejected the dealer's reliance on uncertainty over the taxability of HBS/ENA under GST or VAT, holding that such debate did not erase liability where the dealer remained within the VAT regime, had collected VAT, and retained the tax beyond due date. The appellate order sustaining interest was affirmed and the writ petition failed.

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Issues: (i) Whether interest under section 25(4) of the Goa Value Added Tax Act, 2005 was leviable on delayed payment of VAT where the dealer filed returns and a revised return but paid the tax beyond the prescribed time. (ii) Whether alleged uncertainty as to the taxability of HBS/ENA under the GST or VAT regime exempted the dealer from liability to interest.

Issue (i): Whether interest under section 25(4) of the Goa Value Added Tax Act, 2005 was leviable on delayed payment of VAT where the dealer filed returns and a revised return but paid the tax beyond the prescribed time.

Analysis: Section 25(4) fastens liability to interest where tax is due as per the return or revised return but is not paid, or is paid only in part, within time. Rule 24 reinforces that return filing without payment or with lesser payment is followed by a demand notice and liability to delayed-payment interest at the rate prescribed under section 25(4). The dealer had filed returns showing nil liability for the disputed period and the tax found payable was paid only later, after the due date. The statutory scheme treats such delayed remittance as attracting interest, and the belated revised return did not displace that consequence.

Conclusion: The interest levy was valid and is upheld against the assessee.

Issue (ii): Whether alleged uncertainty as to the taxability of HBS/ENA under the GST or VAT regime exempted the dealer from liability to interest.

Analysis: The Court held that the dealer was conscious that the goods continued to remain taxable under the VAT/CST regime after the GST transition, at least as a residuary taxable commodity under section 5(1)(e), and had itself collected VAT. The existence of debate on GST/VAT classification did not make the tax not due for the relevant period, nor did it justify retention of collected tax without remittance. In the circumstances, the alleged ambiguity did not extinguish the statutory consequence of delayed payment.

Conclusion: The plea of uncertainty was rejected and does not defeat the interest demand.

Final Conclusion: The impugned appellate order sustaining interest on delayed VAT payment is affirmed, and the writ petition fails.

Ratio Decidendi: Where tax is payable under the VAT statute and is reflected as due in returns or revised returns but is remitted after the prescribed time, statutory interest follows notwithstanding a disputed or evolving tax position, if the dealer remained within the VAT regime and retained the tax beyond due date.

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