Facts of the Case

The petitioner challenged an interest demand of Rs.16,66,040/- imposed by the Assistant Commissioner (ST) (In-charge) in Assessment Order No. ZH371122OD68005 dated 25.11.2020, passed under the Andhra Pradesh Goods and Services Tax Act, 2017. The appellate authority, in Form GST Appeal-04 dated 21.02.2023, confirmed the interest liability in full. Aggrieved, the petitioner approached the High Court of Andhra Pradesh, contending that the interest correctly payable was only Rs.14,13,502/-, not the higher figure fastened by the assessing and appellate authorities. During the hearing, counsel for the petitioner, Sri C. Sanjeeva Rao, expressed the petitioner's readiness to deposit the admitted portion of the interest and sought a remand for a fresh opportunity to argue the disputed balance. The State was represented by the Government Pleader for Commercial Taxes-I.

Issues Involved

  1. Whether the interest of Rs.16,66,040/- confirmed by the appellate authority in Form GST Appeal-04 was correctly computed, or whether the petitioner's calculation of Rs.14,13,502/- ought to have been considered.
  2. Whether the petitioner was entitled to a fresh, focused opportunity of hearing before the appellate authority specifically on the quantum of interest, conditional on deposit of the admitted amount.

Petitioner's Arguments

  • Disputed only the quantum of interest, not the underlying liability, asserting that the interest properly chargeable was Rs.14,13,502/- and not the Rs.16,66,040/- confirmed by the first respondent.
  • Offered to deposit the admitted interest amount forthwith as a condition for relief.
  • Sought a remand to the appellate authority for an opportunity to be heard specifically on the correctness of the interest computation, an aspect it contended had not been properly addressed.

Respondent's Arguments

  • The Government Pleader for Commercial Taxes-I appeared for the respondents but did not seriously contest the petitioner's offer to deposit the admitted interest, effectively leaving the question of a remand to the Court's discretion.
  • No separate defence of the correctness of the higher figure of Rs.16,66,040/- is recorded in the order; the respondents' position rested on the assessment and appellate orders already passed confirming that amount.

Court Order/Findings

  • The Court found merit in the reasonability of the petitioner's submission, particularly the readiness to deposit the admitted interest.
  • The order dated 21.02.2023 passed in Form GST Appeal-04 was set aside solely to the extent it confirmed the interest of Rs.16,66,040/- imposed in the Assessment Order dated 25.11.2020.
  • The matter was remitted to the appellate authority to afford the petitioner an opportunity of hearing specifically on the interest demanded, and to pass a fresh order in accordance with law expeditiously.
  • The remand was made conditional on the petitioner depositing the admitted interest of Rs.14,13,502/- within four weeks.
  • No costs were awarded, and pending interlocutory applications, if any, were closed.

Important Clarification

  • Where an assessee disputes only the quantum of interest confirmed in appeal — not the underlying tax liability — and offers to deposit the undisputed portion, courts may remand the interest computation alone for a fresh, focused hearing rather than disturbing the entire appellate order.
  • A willingness to deposit the admitted amount can be a decisive factor in persuading a writ court to grant a conditional remand instead of relegating the assessee to further appellate remedies.
  • This is a short, fact-specific order and does not lay down any general method for computing interest under the GST law.

Sections Involved

  • Andhra Pradesh Goods and Services Tax Act, 2017 — the state GST enactment under which the Assessment Order and the appellate order in Form GST Appeal-04 were passed.
  • Interest on delayed/short payment of tax (Section 50, GST law) — though not expressly cited in this brief order, is the substantive provision governing the kind of interest liability confirmed in the underlying Assessment Order.

Decision – In Favour of

The writ petition was allowed to the limited extent of the interest quantification. Since the underlying tax assessment itself was not disturbed and the appellate order was set aside only in part with a remand, the outcome is best described as disposed of with directions, in part in favour of the Assessee — the petitioner secured a fresh opportunity to contest the interest figure and confined its immediate exposure to the admitted amount, but the final outcome depends on the remanded hearing before the appellate authority.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Andhra Pradesh
  • Case No.: Writ Petition No.21956 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Sri Justice U. Durga Prasad Rao and Hon'ble Sri Justice A.V. Ravindra Babu
  • Decision Date: 04.10.2023
  • Disposal Nature: Allowed and remanded to appellate authority for fresh hearing on interest, subject to deposit of admitted interest

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