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2018 (10) TMI 1839 - HC - GSTLevy of interest under Section 42(3) of the Tamil Nadu Value Added Tax Act 2006 - failure to transfer the amount lying to the credit of merged company after merger - HELD THAT - In view of the submission made by the learned Senior Counsel appearing for the petitioner that the petitioner would pay the sum of 2, 17, 72, 602/- without any dispute there will be an order of interim stay of recovering interest alone in pursuant to the impugned proceedings subject to the condition that the petitioner pays the sum of 2, 17, 72, 602/- within a period of two weeks from the date of receipt of a copy of this order. Post the matter on 25.10.2018 for reporting compliance and getting instructions.
Issues: Impugned demand under Section 42(3) of the Tamil Nadu Value Added Tax Act, 2006; Liability to pay interest; Transfer of funds post-merger; Interim relief against interest demand.
In the judgment delivered by the High Court of Madras, the issue at hand concerned an impugned demand made under Section 42(3) of the Tamil Nadu Value Added Tax Act, 2006. The petitioner argued that they should not be liable to pay interest as the fault lay with the respondent for not transferring a substantial sum of money to the petitioner's account post-merger. The petitioner contended that they were entitled to VAT credit and that demanding interest was unjustifiable. The learned Senior Counsel for the petitioner assured the court that the tax demand of &8377; 2,17,72,602/- would be paid within two weeks, seeking interim relief solely against the interest demand under Section 42(3) of the TNVAT Act, 2006. Considering the submissions made, the court granted an interim stay on recovering interest, given that the petitioner agreed to pay the tax demand promptly. The order stipulated that the petitioner must pay the sum of &8377; 2,17,72,602/- within two weeks from the date of receiving the order. The matter was scheduled for further proceedings on 25.10.2018 to ensure compliance and obtain any necessary instructions. The judgment thus provided temporary relief to the petitioner against the interest demand pending the payment of the tax liability, emphasizing the importance of fulfilling the financial obligations within the specified timeframe to maintain the interim stay on interest recovery.
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