The High Court of Madras has upheld the imposition of interest under Section 50(1) of the Central Goods and Services Tax (CGST) and Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, in conjunction with Rule 88B, for individuals and businesses that make delayed tax payments. This ruling emphasises the importance of timely compliance with tax obligations.
As per the applicant, G.P. Construction, the interest and penalty were incorrectly levied even after the tax payment, but belatedly. Response before show cause notice (SCN) was not regarded which consequence in an error in the impugned order.
The appeal has been contradicted by the department, citing that the petition does not have merit and the applicant had a perfect alternate remedy through the way of appeal to the appellate authority.
The claims from both sides have been analysed by Justice C.Saravanan and said that the applicant has paid late tax. Interest imposed u/s 50(1) of the CGST/TNGST Act, 2017, read with Rule 88B of the CGST Rules, 2017, was justified and did not warrant interference.
The court for the penalty of Rs 5,72,052 charged u/s 73(9) read with Section 122(2)(a), discovered that the applicant may hold a valid basis to contest it. As per that petition was disposed of with a direction to pay the interest, and liberty was provided to submit a plea against the penalty.
The court, if the appeal is submitted in 30 days from the receipt of the order and the applicant deposits 10% of the disputed penalty as needed u/s 107, then the appellate commissioner will hear and determine the case without raising any problem of limitation.
As per that, the writ petition was disposed of.
| Case Title | M/s. G.P. Construction vs. The Commissioner |
| Case No. | W.P.(MD) No.16014 of 2025 and W.M.P.(MD) Nos.12110 & 12111 of 2025 |
| For petitioner | Mr. R. Aravindan |
| For respondents | Mr.N.Dilip Kumar |
| Madras High Court | Read Order |
