GST Section 112(8): Should the interest component be included in the unpaid tax? The HC will make a decision
Fact and issue of the case
Mr. S.D. Sanjay, learned Senior Counsel appearing on behalf of the petitioner, has submitted that against the Appellate Order dated 15.12.2022 passed by the learned Additional Commissioner of State Tax, Appeals, Darbhanga in Appeal No. AD1002200034181 (Annexure-5), the appellant, petitioner herein, has remedy of appeal under Section 112 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “The Act”). The Appellate Tribunal is not functional. He has drawn our attention to an order issued by the Government of India, Ministry of Finance dated 03.12.2019 in exercise of power under Section 172 of the Act for removal of difficulties. He has submitted that by operation of the said order issued under Section 172 of the Act, the limitation for preferring appeal before the Tribunal against the appellate order is now to be computed from the date of constitution of the Tribunal. He has submitted that in view of the said order, the petitioner’s right to prefer appeal still survives. He has also drawn our attention to sub-section (9) of Section 112 read with sub-section (8)(b) thereof and has submitted that the petitioner is ready to deposit 20 per cent of the remaining amount of tax in dispute within one week.
Sub-section (9) of Section 112 of the Act reads as under:-
“(9) Where the appellant has paid the amount as per sub-section (8), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal.”
Observation of the court
In such view of the matter, it is observed that if the petitioner deposits 20 per cent of the remaining tax within one week, recovery of the balance amount shall remain stayed.
Mr. S.D. Sanjay, learned Senior Counsel has submitted that the interest on disputed tax does not come within the expression “remaining tax”
for the purposes of sub-section (8) of Section 112 of the Act. For the present, we are not satisfied with the said submission and we are of the view that component of interest should be part of the remaining tax. This question, however, the Court will address later, after a counter affidavit is filed on behalf of the State, which must be done within a week from today.
List this case on 15.03.2023 retaining its position.
Conclusion
In the result, appeal of the assessee is allowed and ruled in favour of the assessee
