Case Law Details
United Spirits Ltd. Vs Additional Commissioner of State Tax-II And Appellate Auth. (Bombay High Court)
Bombay High Court granted interim relief to United Spirits Ltd. by staying the recovery of interest under the Goa Value Added Tax Act, 2005, pending further consideration of the matter. The company challenged the order dated 29 January 2025 issued by the Additional Commissioner of State Tax and upheld by the Appellate Authority, which levied interest of ₹53,58,986 under Section 25(4) of the Act for delayed tax payment.
United Spirits contended that until November 2024, there was no clarity on whether Extra Neutral Alcohol (ENA) was taxable under the VAT regime or the new tax framework. The company submitted that it had deposited the VAT amount on 30 September 2021, and since the taxability issue remained unsettled for years, the imposition of interest was unjustified.
The Court took note of a communication dated 10 June 2025, directing the petitioner to pay the interest or face recovery proceedings. Observing that the issue required deeper examination, the Court ordered that no coercive steps, including recovery of the interest amount, be taken against the petitioner until the matter is heard and pleadings are complete.
The Court also directed the respondents to file their replies by 10 July 2025, with liberty to the petitioner to file a rejoinder within one week thereafter. The matter was listed for further hearing on 21 July 2025.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Raising a challenge to the impugned Order dated 29.01.2025, passed by the Additional Commissioner of State Tax, the Appellate Authority, thereby levying an interest on the amount of Rs.53,58,986/-under Section 25(4) of the Goa Value Added Tax Act, 2005, for late payment of tax, the appeal has been dismissed.
On hearing the learned Senior Counsel, the question that surfaces before us for consideration is whether the interest could have been levied, as for a considerable period of time till November 2024, there was no clarity as regards whether the subject matter of the levy, namely the Extra Neutral Alcohol (ENA), would be subjected to tax under the VAT regime or under the new regime. Without prejudice to the decision to be taken, it is the case of the Petitioner that on 30.09.2021, the Petitioner deposited the amount of VAT on which now the interest is claimed, and the submission is since till 2024 there was uncertainty about the ENA being subjected to levy, imposition of interest is unwarranted.
Our attention is invited to a communication dated 10.06.2025, addressed to the Petitioner, thereby directing him to pay the amount of interest under VAT Act, failing which, it is directed that the matter shall be referred to the Recovery Cell for forced recovery.
2. Since the issue involved would deserve a deeper consideration and since we expect the Respondents to place before us their respective stand, we deem it appropriate that till the time the pleadings are complete and the matter is taken up for hearing, no coercive steps will be initiated against the Petitioner including any recovery of the amount of interest, which is set out in the impugned order dated 29.01.2025 passed by the Additional Commissioner of Tax Act, who has upheld the order passed by the Assessing Officer.
3. Learned Additional Government Advocate waives service on behalf of Respondent nos. 1 to 4. Despite the copy of the Petition being served upon the Standing Counsel representing the Union of India, he remained absent. Hence we direct the issuance of notice to the Union of India by making it returnable on 21.07.2025.
In the meantime, we expect the Respondents to file their affidavit in reply on or before 10.07.2025 with liberty to file a rejoinder within a period of one week thereof.
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