The Madras High Court has held that the liability to pay the interest on delayed tax is an automatic liability but the quantification cannot be unilateral.
The High Court cannot determine the quantity of interest. The case was that after the introduction of GST basically three types of returns are to be filed. GSTR-1 is Returns showing the details for the outward supply of goods or services supplied by the assessee.
GSTR-2: Returns showing the details for the inward supply of goods or services supplied by the assessee. GSTR-3: Returns showing the details of the total purchase and total sale and tax payable and the input tax credit.
The petitioner could not file the monthly returns of his income because of the recession in the market. As a consequence, the Superintendent of Central Excise Duty demanded a sum of money as an interest for the belated payment of tax. The petitioner no doubt was ready to pay the interest in the tax, however, he was not satisfied with the quantification of the interest calculated.
The issue raised in this case was whether the quantification done by the Superintendent of Central Excise Duty is binding of the petitioner or not?
The Single Bench of Justice K. Ravichandra Babu accepted the fact that the liability to pay the interest on delayed tax is an automatic liability but the quantification cannot be unilateral.
However, the writ petition was dismissed on the grounds that the court can not determine the quantification of the interest imposed on the petitioner.
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