Bombay High Court Strikes Down ₹1.40 Crore Interest Demands Against Microsoft

The Bombay High Court has ruled that levying interest outside of statutory provisions is unconstitutional under Article 265 of the Constitution of India.

MICROSOFT CORPORATION (INDIA) PVT. LTD., a tech giant, was ordered to pay over ₹1.40 crore in interest demands, which were later quashed by the court.

The court held that tax authorities cannot impose an interest liability based on administrative perceptions of 'unjust enrichment' if a dealer remits tax within the timelines prescribed by statutory rules.

The case involved Microsoft's voluntary registration under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) and the Central Sales Tax Act, 1956 (CST Act).