TMI Blog2022 (5) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... proper 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. 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. 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner of CT GST, Odisha in Revision Case No. BHU-105/G/2021-22 under Section 80 of the Odisha Goods and Services Tax Act, 2017 (for short, the OGST ) read with Rule 158 of the Odisha Goods and Services Tax Rules, 2017 (for brevity, the OGST Rules), directed against the demand of interest for the periods from April, 2019 to December, 2019 raised by the CT GST Officer, Bhubaneswar-II Circle, Bhubaneswar for belated deposit of admitted tax, the petitioner has approached this Court invoking provisions of Article 226/227 of the Constitution 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 circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash) . Sri Padhy, learned Advocate for the CT GST Organisation referred to the following as stated at Annexure appended to Form GST DRC-07: You are a registered taxpayer under the CGST/OGST Act, 2017 and you have been self-assessed under Section 59 of the aforesaid Act by filing returns in GSTR-3B and GSTR-1 for the tax period 2019-20 under Section 39 of CGST/OGST Act, 2017. You are also required to pay interest @18% in accordance with the provision under Section 50(1) of OGST/CGST Act or rule made thereunder, if you fail 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paying tax under the provisions of Section 10 or Section 51 or Section 52 shall, for every calendar month or part thereof, furnish, in such form, manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed on or before the twentieth day of the month succeeding such calendar month or part thereof. *** (7) Every registered person, who is required to furnish 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry registered person, who is required to furnish a return, is to pay to the Government the tax due as per such return not later than the last date on which the return is to be furnished. The period prescribed for payment of tax in respect of every month is on or before the 20th day of the succeeding calendar month. However, in case after furnishing return(s), if there is discovery of any omission or incorrect particulars therein by the taxpayer, scope is given to rectify in view 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest is automatic and arises by operation of law. In Commissioner of Sales Tax Vrs. Qureshi Crucible Centre, (1993) 89 STC 467 (SC) and Commissioner of Trade Tax Vrs. Kanhai Ram Thekedar, (2005) 141 STC 1 (SC) consistent view has been expressed to the effect that a dealer shall have to deposit the tax admittedly payable within the time prescribed under the statute and if he fails to do so, interest becomes payable. This levy of interest is by operation of law. It does not require a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] , P 2d p. 604. 33. There is no manner of doubt that normally a person would be entitled to interest for the period he is deprived of the use of money and the same is used by the person with whom the money is lying. *** 8.1. This Court in Naili Kanta Muduli Vrs. Bhubaneswar Development Authority, 2008 (II) OLR 18 (Ori) has observed that Interest means the compensation allowed by law or fixed on by the parties for the use or forbearance for borrowed money. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence, equity demands that A should not only pay back the principal amount but also the interest thereon to B. 8.6. In equity, interest 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-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act or under the Integrated Goods and Services Tax Act, 2017 (Act No.13 of 2017) in such manner and subject to such conditions and within such time as may be prescribed. (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of, (a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of 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 sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due date for payment for interest under the Act to run is not the date of the assessment. 10. The Commissioner of CT GST having taken into consideration the analysis made by the Hon ble Telangana High Court at Hyderabad, vide Judgment dated 18.04.2019 rendered in the case of Megha Engineering Infrastructures Ltd. Vrs. Commissioner of Central Tax, Writ Petition No.44517 of 2018, 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. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable person to pay the said amount. (2) Upon consideration of the request of the taxable person and the report of the jurisdictional officer, the Commissioner may issue an order in Form GST DRC-21 allowing the taxable person further time to make payment and/or to pay the amount in such monthly installments, not exceeding twenty-four, as he may deem fit. (3) 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 Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislation for the very good reason that it has no power to legislate. The power to legislate has not been conferred on the courts. The court cannot add words to a statute or read words into it which are not there. Assuming there is a defect or an omission in the words used by the Legislature the court could not go to its aid to correct or make up the deficiency. Courts 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 play ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ijay Anand Maharaj, AIR 1963 SC 946 = (1963) 1 SCR 1; Rananjaya Singh Vrs. Baijnath Singh, AIR 1954 SC 749 = (1955) 1 SCR 671; Kanai Lal Sur Vrs. Paramnidhi Sadhukhan, AIR 1957 SC 907 = 1958 SCR 360; Nyadar Singh Vrs. Union of India, (1988) 4 SCC 170 = 1988 SCC (L S) 934 = (1988) 8 ATC 226 = AIR 1988 SC 1979; J.K. Cotton Spg. and Wvg. Mills Co. Ltd. Vrs. State of U.P., 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 statu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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