TaxTMI 
TaxTMI 
2022 (5) TMI 1293
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....ion of India with the following prayers: "(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....
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.... to pay the tax or any part thereof within the due date of return filing. However, on the 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): "....
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....urnish a return under sub-section (1) or sub-section (2) or subsection (3) or sub-section (5), shall pay to the Government the tax due as per 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 fo....
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....w of Section 39(9), which is subject to payment of interest. 7.3. Section 50 deals with interest on delayed payment of tax and by virtue of provisions contained therein, a burden is cast on the taxpayer, who 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 5....
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....separate order as such by any authority. 7.7. In Garg Associates Pvt. Ltd. Vrs. Commissioner of Trade Tax, (2005) 139 STC 368 (All) referring to J.K. Synthetics Ltd. Vrs. Commercial Tax Officer, (1994) 94 STC 422 (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 O....
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.... In common parlance, it is naive to mention that a creditor when allows a debtor to use his money for a period exceeding the date until which, such credit was given, takes an extra amount is known as interest. 8.2. "Conventional interest" and "legal interest" have been explained in Black's Law 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 fol....
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....t may be recovered in certain cases where a particular relationship exists between the creditor and the debtor. Interest is also payable where there has been misconduct or improper delay in payment, or in the case of money obtained or retained by fraud. It may also be allowed where the defendant ought to have done something which would have entitled 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 ....
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....f central tax and State tax, or as the case may be, Union Territory tax, in that order; (b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax; (c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated 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 electroni....
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....018, has come to the just conclusion. The Judgment of Single Bench of the Hon'ble Kerala High Court rendered in the case of Pazhayidom Food Ventures (P) Ltd. Vrs. Superintendent Commercial Taxes, W.P. (C) No. 14275 of 2020 (H), Decided on July 24, 2020 reported at 2020 SCC OnLine Ker 12929, as referred to by the petitioner is distinguishable on facts. Material fact on which the said Court proceeded to allow the petitioner therein to discharge liability to pay interest on instalment is that: "4. It is also relevant to note that, 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, Bhub....
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....The facility referred to in sub-rule (2) shall not be allowed where- (a) The taxable person has already defaulted on the payment of any amount under the Act or the Integrated Goods and Service Tax Act, 2017 or the Union Territory Gods and Services Tax Act, 2017 or any of the Central Goods and Services Tax Act, 2017 for which the recovery process is on; (b) The taxable person has not been allowed to make payment in installments in the preceding financial year under the Act or the Integrated Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act, 2017 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 6....
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....rts shall decide what the law is and not what it should be. The court of course adopts a construction which will carry out the obvious intention of the Legislature but could not legislate itself. But to invoke judicial activism to set at naught legislative judgment is subversive of the constitutional harmony and comity of instrumentalities." 10.6. It is fairly well-settled that statute being an edict of the Legislature, it is necessary that it is expressed in clear and unambiguous language. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the Legislature is clearly 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 Frankfu....
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...., AIR 1961 SC 1170; and Ghanshyamdas Vrs. CST, AIR 1964 SC 766 = (1964) 4 SCR 436]." 10.8. Plain reading of the provisions of Section 80 admits of no ambiguity that the Commissioner of CT&GST is empowered to allow the payment of "any amount due" under the Act in monthly instalments not exceeding twenty-four subject to payment of interest under Section 50 and also subject to such condition and limitation under Rule 158. One of the conditions is reflected in the said provision itself, i.e., the instalment cannot be allowed in the circumstance when the liability to be discharged is on account of self-assessed returns. Therefore, necessary 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 (m....