GST interest liability cannot be waived absent statutory power; contractual tax-burden disputes do not bind tax authorities.

Under the GST regime, interest on delayed tax payment accrues by operation of law where the statute so provides, and the authority cannot waive, reduce, or ignore that liability without express enabling power. Directions permitting filing or revised filing of returns outside the statutory scheme, together with blanket waiver of interest, penalty, and limitation and restraint on coercive recovery, were stated to be inconsistent with the GST framework and therefore unsustainable. The text also treats reimbursement of incremental tax burden as a contractual issue between the parties to a works contract; such inter se arrangements cannot alter statutory tax liability or justify directions against tax authorities. The impugned order was set aside to that extent.

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Issues: (i) Whether directions permitting filing of returns or revised returns while waiving interest, penalty, and limitation under the GST regime, and restraining coercive action by the tax authorities, were sustainable. (ii) Whether the dispute regarding reimbursement of incremental tax burden arising from the GST regime could justify directions against the tax authorities.

Issue (i): Whether directions permitting filing of returns or revised returns while waiving interest, penalty, and limitation under the GST regime, and restraining coercive action by the tax authorities, were sustainable.

Analysis: Liability to pay interest on delayed tax payment arises by operation of law where the statute so provides, and the authority has no discretion to waive or reduce such levy in the absence of enabling provision. Directions allowing filing or amendment of returns in a manner not contemplated by the GST statute, together with blanket waiver of interest, penalty, and limitation, were inconsistent with the statutory scheme governing tax, interest, assessment, and recovery.

Conclusion: The directions permitting revised returns and waiving interest, penalty, and limitation were unsustainable.

Issue (ii): Whether the dispute regarding reimbursement of incremental tax burden arising from the GST regime could justify directions against the tax authorities.

Analysis: The question who must bear the incremental tax burden is essentially a contractual dispute between the parties to the works contract. Such inter se contractual arrangements cannot alter the statutory liability under the GST enactments or justify directions to the tax authorities concerning levy, assessment, collection, or enforcement of tax and interest.

Conclusion: No direction could be issued to the tax authorities on that basis, and the reimbursement direction was confined to the contracting parties.

Final Conclusion: The impugned order was set aside insofar as it affected the writ petition, and the appellate challenge succeeded.

Ratio Decidendi: Where a fiscal statute imposes interest on delayed tax payment, the authority cannot waive or dilute that liability absent express statutory power, and contractual disputes over tax incidence cannot be converted into directions against the tax administration.

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