Delayed Payment Cannot Be Equated with Failure to Pay{ M/s. Saudi Arabian Airlines v. Union of India & Ors 2026 INSC 933}
Facts:
Appellant, Saudi Arabian Airlines, was liable to pay Foreign Travel Tax. On certain occasions, the tax was paid after the prescribed period, resulting in a delay in payment. The authorities treated such delayed payment as a “failure to pay” and imposed penalty under the relevant provision.
Issue:
Whether delay in payment of tax can be treated as “failure to pay” for the purpose of imposing a penalty under the penal provision.
Held:
The Hon’ble Supreme Court held that “failure to pay” and “delay in payment” are legally distinct concepts. The expression “fails to pay” refers to non-payment, whereas a person who ultimately makes the payment, though belatedly, has delayed the payment and has not failed to pay. Therefore, a provision imposing a penal consequence for “failure to pay” cannot automatically be invoked merely because the payment was made after the prescribed period.
Relevance to 180-day payment delay:
The judgment can be relied upon to contend that where the amount has ultimately been paid within 180 days, though after the prescribed period, such delayed payment should not, merely on that ground, be equated with complete failure/non-payment, particularly where the applicable penal provision specifically uses the expression “fails to pay.”
