TaxTMI 
TaxTMI 
2022 (5) TMI 1293
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.... "(a) Rule NISI calling upon the Opposite Parties as to why the impugned Order under Annexure-4 in absence of any reason, shall not be held to be illegal, arbitrary and violation of Natural Justice. (b) And if they fail to show cause or show insufficient cause make the Rule absolute. (c) Issue a direction to O.P. to rectify the demand raised vide DRC-07 under Annexure-1. (d) And be further pleased to allow the petitioner to pay the admissible interest amount in 24 installments in accordance with law. (e) Issue any appropriate order/orders deemed fit in the fact and circumstances of the case." 3. The case of the petitioner is that in terms of the Section 39 read with Section 59 of the OGST Act, returns for the period 2019-20 in Form GSTR-3B and GSTR-1 have been furnished on self-assessment. While undertaking the scrutiny of said self-assessed returns furnished for each tax periods as per Section 39, the CT & GST Officer noticed that the petitioner has filed the returns belatedly. 4. The petitioner has alleged that non-payment of admitted tax is attributed to non-disbursal of substantial amount standing due from IDCOL, a Government Agency. It is submitted by Ms. Kananbala....
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....e basis of GSTR-3B returns filed by you, it is noticed that you have filed GSTR-3B returns belatedly as mentioned below but have not paid the interest liability, on your own, on the delayed payment of tax (through cash) which violates the statutory provisions. Hence, as per your GSTR-3B returns, you have to pay interest amount of Rs.68,15,506/- ***" 5.1. Sri Padhy also submitted, on instruction, that the Commissioner of CT&GST has rightly rejected the prayer of the petitioner inasmuch as the claim is contrary to the express language of Section 80 of the OGST Act. With reference to Annexure-2 to the writ petition, i.e., Application in Form GST DRC-20 filed before the Commissioner of CT&GST, it is contended by him that the rejection of prayer for allowing the petitioner 36 (thirty-six) instalments is just and proper. The learned Advocate for the CT&GST Organisation pressed for rejection of the writ petition by subscribing to the following reason ascribed by the Commissioner of CT&GST while rejecting the Application in Form GST DRC-20 vide impugned Order dated 08.02.2022 (Annexure-4): "*** Gone through the prayers of the petitioner and order passed by the forum below. It is noticed....
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....r such return not later than the last date on which he is required to furnish such return. (8) Every registered person who is required to furnish a return under sub-section (1) or sub-section (2) shall furnish a return for every tax period whether or not any supplies of goods or services or both have been made during such tax period. (9) Subject to the provisions of Sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2), sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act: Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following or the end of the financial year, or the actual date of furnishing of relevant annu....
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....o is liable to pay tax, but failed to pay the same, to pay interest not exceeding 18%. The liability to pay interest under Section 50(1) is a statutory obligation which the taxpayer is obligated to comply with "ON HIS OWN" accord. The liability to pay interest under Section 50, being compensatory for non-deposit of tax within the stipulated period envisaged under Section 39, is not penal in nature. Therefore, the petitioner cannot escape the rigours of liability of interest. 7.4. From sub-section (1) of Section 50, it is manifest that the liability to pay interest arises automatically, when a person who is liable to pay tax, fails to pay the tax to the Government within the period prescribed. The liability to pay interest arises in respect of the period for which the tax remains unpaid. In fact, the liability to pay interest under Section 50(1) arises even without any assessment, as the person is required to pay such interest "ON HIS OWN". While sub-section (1) of Section 50 speaks about the liability to pay interest under one contingency, viz., the failure to pay tax within the period prescribed, sub-section (3) thereof speaks about the liability to pay interest under a different....
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....(SC), it has been held that the statutory provision authorising the State or the Revenue to charge interest on delayed payment of tax must be construed as the substantive law and not procedural law. Thus, the State Government is empowered by the Legislature to raise revenue through the mode prescribed in the Act so that the State should not suffer on account of delay, caused by the tax-payers in payment of tax. The interest is payable on the tax admittedly payable which is due. The purpose of charging interest is to compensate the revenue for the loss caused to it due to the late payment. If no loss has been caused to the department or the revenue as the money was already lying in deposit with the department earlier, no interest can be charged in such circumstances, by the department. The condition precedent for levy of interest under the provisions of the Act is only if there is default in payment of tax admittedly due to the department. In Prahlad Rai Vrs. Sales Tax Officer, (1992) 84 STC 375 (SC) it has been laid down that accrual of interest is automatic and no separate notice of demand is necessary. 8. The meaning of "interest" and its purport has been discussed in State of K....
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....Dictionary thus: Conventional interest: "Interest at the rate agreed upon and fixed by the parties themselves, as distinguished from that which the law would prescribe in the absence of an explicit agreement." Legal interest: "A rate of interest fixed by statute as either the maximum rate of interest permitted to be charged by law, or a rate of interest to be applied when the parties to a contract intend an interest to be paid but do not fix the rate in the contract. Even in the latter case, frequently this rate is the same as the statutory maximum rate permitted. Term may also be used to distinguish interest in property or in claim cognisable at law in contrast to equitable interest." 8.3. In Pratibha Processors Vrs. Union of India, AIR 1997 SC 138 = (1996) 11 SCC 101, distinction between "tax", "interest" and "penalty" has been culled out in the following manner: "13. In fiscal statutes, the import of the words- 'tax', 'interest', 'penalty', etc. are well known. They are different concepts. Tax is the amount payable as a result of the charging provision. It is a compulsory exaction of money by a public authority for public purposes, the payment of which is enforced by ....
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....led the plaintiff to interest at common law, or has wrongfully prevented the plaintiff from doing something which would have so entitled him. However, payment of tax is not under a contract between the taxpayer and the State. There is plain repugnance between contract and taxation. Taxation is the very antithesis of contract. 8.7. In the present case the admitted tax on self-assessment being not deposited within the period stipulated, the petitioner is liable to compensate the State Government by way of interest which is provided for under the statute. 9. In Khazan Chand Vrs. State of Jammu & Kashmir, (1984) 56 STC 214 (SC) it has been laid down that payment of interest in case of default in payment of tax is a means of compelling the assessee to pay the tax due by the prescribed date and that it is a mode of recovery of tax and well within the legislative power of the State. Provisions in that behalf form part of the recovery machinery provided in a taxing statute. It is for the State to provide by what means payment of tax is to be enforced and a person who does not pay the amount of tax lawfully and admittedly due by him can hardly complain of the measures adopted by the State....
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....ated tax; (d) the Union territory tax shall first be utilized towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax; (e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and (f) the State tax or Union territory tax shall not be utilised towards payment of central tax. (6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of Section 54. (7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed. (8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely: (a) self-assessed tax, and other dues related to returns of previous tax periods; (b) self-assessed tax, and other dues related to the return of the current tax period; (c) any other amount payable under this Act or the rules made thereunder inc....
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....at, as of today, there is no demand against the petitioner for the unpaid tax amount." Said Court having not discussed the provisions of the GSTT Act, said Judgment may not have binding precedent to persuade this court to grant similar relief to the petitioner. However, in the present case, the petitioner has taken step by approaching the Commissioner of CT&GST by making an application in Form GSTR DRC-20 prescribed under Rule 158 invoking Section 80 after it has received the notice of demand in Form GST DRC-07. Therefore, this Court is not inclined to accede to the prayer of the petitioner. 10.1. It is noticed that had the CT&GST Officer, Bhubaneswar-II Circle, Bhubaneswar not issued demand notice in Form GST DRC-07 directing the petitioner to deposit interest on delayed payment, interest to the tune of Rs.68,15,505/- would have escaped. It is reason best known to the petitioner as to why after deposit of admitted tax belatedly, did not deposit the interest component thereon "ON HIS OWN". Matter would have stood on different footing had the petitioner sought to deposit interest on its own in view of requirement under Section 50(1). 10.2. Furthermore, provision of Section 80 ap....
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....7 or any of the Central Goods and Services Tax Act, 2017; (c) The amount for which installment facility is sought is less than twenty-five thousand rupees." 10.3. As has been held in Baidyanath Ayurved Bhawan v. Excise Commissioner, U.P., AIR 1971 SC 378, in interpreting a taxing statute, the Court should not ordinarily concern themselves with the policy behind the provisions or even with its impact. In that case, the Hon'ble Supreme Court of India referred with approval to the observations made by Rowlatt, J., in Cape Brandy Syndicate v. Inland Revenue Commissioners, [1921] 1 KB 64 (at p. 71) which were as follows: "*** in a taxing Act one has to look at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 10.4. Be it noted that individual cases of hardship and injustice do not and cannot have any bearing for rejecting the natural construction by attributing normal meanings to the words used since hard cases do not make bad laws. A fiscal statute shall have to be interpreted on the basis of the language....
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....y conveyed, there is no scope for the court to innovate or take upon itself the task of amending or altering the statutory provisions. In that situation the judges should not proclaim that they are playing the role of a lawmaker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased. This can be vouchsafed by "an alert recognition of the necessity not to cross it and instinctive, as well as trained reluctance to do so". (See Frankfurter: "Some Reflections on the Reading of Statutes" in Essays on Jurisprudence, Columbia Law Review, p. 51 as referred to in A. Ram Mohan Vrs. State by the Inspector of Police and Others, 2015 SCC OnLine Mad 14282). 10.7. In Nathi Devi Vrs. Radha Devi Gupta, (2005) 2 SCC 271 = AIR 2005 SC 648, the Apex Court held that, "13. The interpretative function of the court is to discover the true legislative intent. It is trite that in interpreting a statute the court must, if the words are clear, plain, unambiguous and reasonably susceptible to only one meaning, give to the words that meaning, irrespective of the consequences....
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.... corollary would be that the Commissioner of CT&GST is empowered to invoke Section 80 for allowing taxpayer to discharge liability in instalment when demand is raised under the statute. However, the Commissioner of CT&GST is required to assign reasons in writing for the said purpose. In other words, it may be stated that this section permits a taxable person to make payment of an amount due on instalment basis, other than the amount due as per self-assessed return. The term 'instalments' in general parlance would mean equated periodical payments (money due) spread over an agreed period of time. This provision happens to be a beneficial piece of law to the tax payers to pay the demand in instalments along with interest. Nonetheless, as stated earlier, the amount should not be the amount due as per the liability as self-assessed in any return. Therefore, the amount which is payable pertains to a demand notice can be deferred or paid in instalments. 10.9. Section 39 of the OGST/CGST Act specifies time frame within which returns are to be furnished. Such returns are considered to be self-assessed returns under Section 59 ibid. 10.10. Section 59 is reproduced herein below: "Every re....