2026-VIL-1050-BOM
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VAT High Court Cases

Maharashtra VAT Act, 2002 - Periodicity of filing returns under MVAT Act, Levy of interest for alleged delayed payment of tax - Petitioner obtained registration voluntarily and became eligible to file six-monthly returns under Rule 17(4) read with Rule 41 of the MVAT Rules, 2005, based on previous year's tax liability being below the prescribed threshold - Petitioner filed six-monthly returns for the relevant financial year and discharged tax liability within the due dates - Respondent levied interest under Section 30(2) of the MVAT Act, 2002 on the premise that petitioner ought to have paid tax on monthly basis and had thereby unjustly enriched itself by deferring substantial tax revenue. - Whether interest under Section 30(2) of the MVAT Act can be levied where the assessee has filed returns and paid tax in compliance with the statutory periodicity prescribed under Rule 17(4) and the due date prescribed under Rule 41 of the MVAT Rules - HELD - Section 30(2) provides for compensatory interest on the amount of tax not paid within the time specified by or under the Act, and the sine qua non for levy of interest is failure to pay tax within the time specified in the Act. Section 32 read with Rule 41 prescribe that tax be paid on or before the date specified for submission of return. Section 20 read with Rule 17 prescribe that every registered dealer whose tax liability during the previous year was below the threshold shall file a six-monthly return and thus is required to pay tax on a six-monthly basis - Once the Rules prescribe the periodicity of filing return and due date for payment of tax, the same are binding both on the assessee and the respondents. The respondent has no jurisdiction to decide or alter such periodicity based on his own surmises or perceptions unless supported by very cogent materials or the sanction of law - The MVAT Act does not create any concept of unjust enrichment in relation to return periodicity or timing of tax payment where the dealer has acted strictly in accordance with the prescribed Rules. Payment of tax within the legally prescribed due date cannot be characterised as deferment or enrichment merely because the turnover during the relevant year was substantial - The levy of interest is dehors the statutory provisions and therefore is constitutionally impermissible. The interest is a fiscal levy and can be imposed only with the authority of law – The levy of interest under Section 30(2) of the MVAT Act is set aside – The writ petition is allowed
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