Commissioner not empowered to allow interest payment in instalments: HC

Case Details: P.K. Ores (P.) Ltd. v. Commissioner of Sales Tax - [2022] 139 taxmann.com 24 (Orissa)

Judiciary and Counsel Details

• • Jaswant Singh & Murahari Sri Raman, JJ.
  • Ms Kananbala Roy Choudhury, Adv. for the Petitioner.
  • Sidharth Shankar Padhy for the Respondent.

Facts of the Case

During the scrutiny of self-assessed returns furnished by the petitioner, the GST Officer noticed that the petitioner has filed the returns belatedly. The demand of payment of interest was raised and it requested before the Commissioner to allow payment of interest in instalments under Section 80 of GST Act. The request to pay interest in instalments was rejected and it filed writ petition against the same.

High Court Held

The Honorable High Court observed that interest payable under Section 50(1) is compensatory and not penal in nature. The levy of interest arising out of statutory consequence is different from the levy of interest which is dependent on the discretion of the assessing officer as non-payment of tax in case of self-assessment would attract automatic levy of interest. Therefore, it was held that the Commissioner was justified in rejecting prayer to deposit interest on instalment basis as Commissioner is not empowered to allow payment in instalment in respect of amount due as per self-assessed returns furnished.