M/S Sarc Construction Company vs. Union Of INDIA And 4 Others
Held
The Court did not make a definitive finding on the petitioner's entitlement to interest. Instead, it directed the BSNL authority to examine the dates of bill raising by the petitioner and the date of deduction by BSNL. The Court observed that BSNL may be liable for withholding the amount without just reason for the period from deduction till actual payment of tax. If this fact is verified, BSNL may be liable for reimbursement of the interest amount to the petitioner. The Court disposed of the writ petition by directing the petitioner to make a fresh representation to respondent no. 2 (taxation authorities), who shall pass a reasoned and speaking order within two months. Any interest found due to the petitioner is to be paid out within a further period of one month.
Facts
The petitioner, M/s Sarc Construction Company, is claiming interest on defaulted GST amounts recovered from them for the period 2017 to 2019. The GST amount was deducted by BSNL from payments made to the petitioner. BSNL failed to deposit this deducted amount in time, leading the taxation authorities to seek recovery from the petitioner. The petitioner deposited the defaulted GST amount. Subsequently, BSNL reimbursed an equal amount to the petitioner on September 9, 2022. The petitioner's remaining grievance is the recovery of interest by taxation authorities on the alleged default in payment of pre-deducted GST by BSNL.
Key Issues
1. Whether the petitioner is entitled to interest on the GST amount that was deducted by BSNL but not deposited in time, leading to recovery from the petitioner, considering BSNL subsequently reimbursed the principal amount. This issue turns on the interpretation of the petitioner's liability for interest when the default in deposit was by a third party (BSNL) and the petitioner has ultimately borne the burden of the principal amount. Contentions: Petitioner: Argued that since BSNL deducted the GST amount and failed to deposit it, and BSNL later reimbursed the principal amount, the petitioner should not be liable for interest on the defaulted amount. The petitioner implicitly argues for a refund of the interest recovered. Respondent (Union of India and others): The judgment does not record specific arguments from the respondents regarding the petitioner's entitlement to interest. However, the taxation authorities had recovered the interest from the petitioner.
Sections Cited
None explicitly mentioned
AI-generated summary — verify with the full judgment below
Chief Justice's Court Case :- WRIT TAX No. - 441 of 2023 Petitioner :- M/S Sarc Construction Company Respondent :- Union Of India And 4 Others Counsel for Petitioner :- Aloke Kumar,Ajay Pratap Singh Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan,Ravi Ranjan Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Saumitra Dayal Singh,J.
Heard Sri Aloke Kumar, assisted by Sri Ajay Pratap Singh, learned counsel for the petitioner, Sri Anil Kumar Rai, learned counsel for the respondent no. 1, Sri Ravi Ranjan, learned counsel for the respondent nos. 2, 3 and 4 and Sri Gaurav Mahajan, learned counsel for the respondent no. 5. 2. Petitioner is claiming payment of interest on defaulted GST amount that was recovered from him for the period 2017 to 2019. 2. Submission of learned counsel for the petitioner is, the amount of GST payable had been deducted by BSNL from the payments made to the petitioner. Since the same was not deposited in time by BSNL, the taxation authorities sought recovery of the same from the petitioner. The petitioner has also deposited the defaulted amount of GST. It has also come on record that subsequently the BSNL has reimbursed an equal amount to the petitioner, on 0
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