Sri Vinayaka Industries Vs State Tax Officer
Date: October 28, 2025
Subject Matter
Taxpayer is legally bound to pay interest on delayed GST payments
Summary
This is the second round of litigation for the petitioner. The petitioner challenged the impugned order dated March 11, 2025, which was passed by the original authority following a remand from the High Court regarding the tax period 2018-2019.
Summary of Facts:
First Round of Litigation (WP.Nos. 11999 & 12782 of 2024): The petitioner challenged the original assessment orders (dated 20.07.2023 and 09.11.2023) because they failed to contest the proceedings.
Remand Order (Dated 07.06.2024): The High Court set aside the original ex parte orders, subject to the condition that the petitioner:
Remit 20% of the interest demand within two weeks.
Submit a reply to the show cause notice within the same period.
The respondent was then directed to provide a personal hearing and issue fresh assessment orders.
Second Round Default: The petitioner was issued a personal hearing notice (dated 08.01.2025 for hearing on 10.01.2025) but failed to respond or attend.
Impugned Order: The petitioner suffered the subsequent adverse order (dated 11.03.2025) pursuant to the remand, which the petitioner now challenges.
Core Dispute: The court found that the entire dispute, even after remand, "only pertains to the interest under Section 50 (1) of the respective GST Enactments Act" for belated payment of tax.
Ruling:
The High Court dismissed the Writ Petition.
Non-Interference with Interest Demand: The Court found no reason to interfere with the impugned order. The dispute is confined to the interest liability under Section 50(1) for the belated payment of tax, a mandatory liability which the petitioner is legally bound to pay. The petitioner was granted a second chance through the previous remand order but failed to utilize the opportunity by not attending the personal hearing.
Alternative Remedy: The Court noted that the only viable relief the petitioner can now seek is administrative flexibility in payment.
Direction:
The Writ Petition is dismissed, but liberty is given to the petitioner to approach the respondent under Section 80 of the respective GST Enactments Act, if so advised, to seek payment of the interest demand in installments.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mr. C.Harsharaj, learned Special Government Pleader, takes notice for the 1st Respondent.
2. This Writ Petition is being disposed of at the time of admission with the consent of the learned counsel for the Petitioner and learned Special Government Pleader for the 1st Respondent.
3. This is the second round of litigation before this court. Earlier also, the petitioner had suffered an order dated 20.07.2023 for the tax period 2018-19 and yet another order for the tax period 2019-2020 vide order dated 09.11.2023. It appears that the petitioner had failed to contest the order and thus suffered the two orders mentioned above. Therefore, the petitioner challenged the same before this court in WP.Nos.11999 and 12782 of 2024 which came to be disposed of 07.06.2024 by the following observations :
5. For reasons set out above, the impugned orders dated 20.07.2023 and 09.11.2023, respectively, are set aside, subject to the condition that the petitioner remits 20% of the interest demand under each assessment order within a maximum period of two weeks from the date of receipt of a copy of this order. Within the aforementioned period, the petitioner is also permitted to submit a reply to the show cause notice. Upon receipt thereof and upon being satisfied that 20% of the interest demand in respect of each assessment was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh assessment orders within a period of three months from the date of receipt of the petitioner’s reply.
6. P.Nos.11999 and 12782 of 2024 are disposed of on the above terms. No costs. Consequently, W.M.P.Nos.13096, 13099, 13949 and 13950 of 2024 are closed.
4. After the aforesaid order was passed on 07.06.2024, the petitioner was called for a personal hearing by issuance of notice dated 08.01.2025, fixing the date of personal hearing as 10.01.2025. The petitioner however failed to respond to the personal hearing notice and has thus suffered adverse order dated 11.03.2025. The petitioner has now approached this court by filing this writ petition on 19.09.2025. The impugned order pursuant to confined to the tax period 2018-2019. Thus the impugned order is the remand order in after order dated 20.07.2023 impugned earlier in WP.11999 of 2024 was set aside.
5. Reading of the order of the court dated 07.06.2024 and also the impugned order indicates that dispute only pertains to the interest under Section 50 (1) of the respective GST Enactments Act, Thus the petitioner is liable to pay interest on the belated payment of tax. There is no scope for any intereference either before the original authority or before the appellate authority. At best, the petitioner can seek for payment of interest in instalment under Section 80 of the respective GST Enactments Act.
6. Viewed from the above angle, I see no reasons to interfere with the impugned order. However, liberty is given to the petitioner to approach the respondent, under Section 80 of the respective GST Enactments Act, if so advised.
7. In the result, this Writ Petition stands dismissed with the above liberty. No costs. Connected Writ Miscellaneous Petition is closed.