Can Tax be deemed to have been paid in time once interest is paid for delayed payment

[Somit Goyal]

In one of the case the Department is demanding interest from the recipient for claim of ITC where supplier have delayed in their payment of taxes citing the reason that you have claimed ITC earlier then the same becoming eligible. In such situation, if the Supplier has paid interest then one should be in a position to contest that taxes are deemed to have been paid in time. Can someone throw more light on this theory?

AI Summary

Payment of interest does not automatically make tax payment timely; credit arises when supplier actually pays and discloses it.
Whether tax can be treated as paid in time for input tax credit is contested: some treat supplier payment and return disclosure as post-facto conditions that can regularise earlier credit; others hold that paying interest does not make the tax payment timely. Practically, credit becomes claimable only when the supplier actually pays the tax to the government and the transaction appears in the recipient's purchase-side returns.