The imposition of interest under the KGST Act for delayed tax payments during the pandemic was deemed unjustifiable due to prior ambiguities in tax regulations.

J U D G M E N T

The petitioner, a bar attached hotel, has filed the captioned writ petition seeking to challenge Ext.P4 assessment order for the assessment year 2000-21 to the extent of the imposition of interest under the provisions of the Kerala General Sales Tax Act (KGST), 1963 (hereinafter referred to as 'Act').

2. I have heard Sri. Aji V. Dev, the learned counsel for the petitioner, and Smt. Jasmine, the learned Government Pleader.

3. The interest under the provisions of Section

23(3) of the Act has been imposed by Ext.P4 for the delay in satisfaction of tax with reference to the retail sales/counter sales of Indian Made Foreign Liquor (IMFL) during the Covid- 19 lockdown period. There was some confusion as regards the tax rate to be satisfied with reference to the aforementioned periods since counter sales were taxable only at the rate of 5%. The clarity has been made by the Government only by the amendment carried out in the year

2022, stating that the liability to satisfy the tax at the rate of 5% would be from 2022. Insofar as the petitioner has paid tax at the rate of 5 percentage with reference to the outer time limit for payment of tax as fixed by the Government as above, I am of the opinion that the demand of interest by Ext.P4 cannot be sustained.

In this regard, I also take note of the Judgment of the learned Single Judge of this Court in W.P. (C) No.32408 of 2023. Therefore, the writ petition would stand allowed, setting aside Ext.P4 and directing the assessing authority concerned to pass fresh orders after taking note of the principles laid down by this Court in aforementioned Judgment.

Sd/-