How does s.15 actually work - fifteen days, or forty-five, and what if the supplier registered after the invoices?
Section 15 obliges the buyer to pay by the date agreed in writing and, where there is no such agreement, before the appointed day, which is fifteen days from acceptance or deemed acceptance; the proviso caps any agreed period at forty-five days. On the facts, the supplier's registration post-dated the invoices by a wide margin, the invoices running from 17 May 2013 to 15 July 2015 against registration with effect from 31 December 2016.
Decided by the High Court (A.P. Thaker J) on 2022-12-16, reported as Special Civil Application No. 2825 of 2020. It bears on section MSMED s.15, section MSMED s.16, section MSMED s.2(n), section MSMED s.18 of the Income Tax Act 1961, in How Tax Law Is Read matters.
It states the two limbs of s.15 in a single place and applies the registration-timing rule to a real sequence of invoices, which is the exercise a practitioner has to do on an MSME ledger before deciding whether s.43B(h) bites.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner challenged an award of the State Level Industry Facilitation Council dated 3 May 2019. Respondent no. 3, the supplier, was registered in the 'E' category, that is as a small enterprise, with effect from 31 December 2016. The invoices on which the claim was founded had been raised separately and distinctly during the period from 17 May 2013 to 15 July 2015, so the supplies preceded the registration.
Could not be established. The document available breaks off in the course of the Court's discussion of the scope of supervisory jurisdiction and does not reach the final order. What the Court states in the course of its reasoning is that, on a conjoint reading of s.15 and s.2(b) of the MSMED Act, s.15 casts an obligation upon the buyer to make payment to the supplier within the period agreed upon or within fifteen days of acceptance or deemed acceptance of the goods or services (para 14). In a later paragraph, returned as para 51 on the copy read, the Court reproduces the rest of the section - that payment is to be made on or before the date agreed upon between the parties in writing and, in the absence of an agreement, before the appointed day - together with the proviso, that in no case shall the period agreed upon between the supplier and the buyer in writing exceed forty-five days from the day of acceptance or the day of deemed acceptance. Para 11 is not about s.15 at all: it records that s.18 provides for making a reference to the Facilitation Council by a party to a dispute with regard to any amount due under s.17.
The Court set out the structure of Chapter V - s.15 fixing the time for payment, s.16 attaching compound interest on default - and read s.15 together with the definition of the appointed day in s.2(b), so that the fifteen-day period is the default (para 14) and the forty-five day proviso is a ceiling on an agreed period rather than an entitlement (in the later paragraph reproducing the proviso, returned as para 51). Against that framework it examined the dates, recording that the registration took effect on 31 December 2016 while the invoices ran from 17 May 2013 to 15 July 2015. The step from those dates to the disposition could not be read.
in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days
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Handle my notice → Ask a CA on WhatsAppSection 15 obliges the buyer to pay by the date agreed in writing and, where there is no such agreement, before the appointed day, which is fifteen days from acceptance or deemed acceptance; the proviso caps any agreed period at forty-five days. On the facts, the supplier's registration post-dated the invoices by a wide margin, the invoices running from 17 May 2013 to 15 July 2015 against registration with effect from 31 December 2016. This was decided by the High Court (A.P. Thaker J) and bears on section MSMED s.15, section MSMED s.16, section MSMED s.2(n), section MSMED s.18 of the Income Tax Act 1961. It is reported as Special Civil Application No. 2825 of 2020. It states the two limbs of s.15 in a single place and applies the registration-timing rule to a real sequence of invoices, which is the exercise a practitioner has to do on an MSME ledger before deciding whether s.43B(h) bites. If it applies to you, the first step is this: Establish first whether there is an agreement in writing fixing a payment date; if there is not, the fifteen-day limb applies and the forty-five day figure is irrelevant.
The petitioner challenged an award of the State Level Industry Facilitation Council dated 3 May 2019. Respondent no. 3, the supplier, was registered in the 'E' category, that is as a small enterprise, with effect from 31 December 2016. The invoices on which the claim was founded had been raised separately and distinctly during the period from 17 May 2013 to 15 July 2015, so the supplies preceded the registration. The matter was decided on 2022-12-16 by the High Court (A.P. Thaker J). On those facts the High Court held as follows. Could not be established. The document available breaks off in the course of the Court's discussion of the scope of supervisory jurisdiction and does not reach the final order. What the Court states in the course of its reasoning is that, on a conjoint reading of s.15 and s.2(b) of the MSMED Act, s.15 casts an obligation upon the buyer to make payment to the supplier within the period agreed upon or within fifteen days of acceptance or deemed acceptance of the goods or services (para 14). In a later paragraph, returned as para 51 on the copy read, the Court reproduces the rest of the section - that payment is to be made on or before the date agreed upon between the parties in writing and, in the absence of an agreement, before the appointed day - together with the proviso, that in no case shall the period agreed upon between the supplier and the buyer in writing exceed forty-five days from the day of acceptance or the day of deemed acceptance. Para 11 is not about s.15 at all: it records that s.18 provides for making a reference to the Facilitation Council by a party to a dispute with regard to any amount due under s.17.
The Court set out the structure of Chapter V - s.15 fixing the time for payment, s.16 attaching compound interest on default - and read s.15 together with the definition of the appointed day in s.2(b), so that the fifteen-day period is the default (para 14) and the forty-five day proviso is a ceiling on an agreed period rather than an entitlement (in the later paragraph reproducing the proviso, returned as para 51). Against that framework it examined the dates, recording that the registration took effect on 31 December 2016 while the invoices ran from 17 May 2013 to 15 July 2015. The step from those dates to the disposition could not be read. In the words reproduced by the source cited on this page: "in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days"
It was decided by the High Court on 2022-12-16 and is reported as Special Civil Application No. 2825 of 2020. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section MSMED s.15, section MSMED s.16, section MSMED s.2(n), section MSMED s.18, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Could not be established. The document available breaks off in the course of the Court's discussion of the scope of supervisory jurisdiction and does not reach the final order. What the Court states in the course of its reasoning is that, on a conjoint reading of s.15 and s.2(b) of the MSMED Act, s.15 casts an obligation upon the buyer to make payment to the supplier within the period agreed upon or within fifteen days of acceptance or deemed acceptance of the goods or services (para 14). In a later paragraph, returned as para 51 on the copy read, the Court reproduces the rest of the section - that payment is to be made on or before the date agreed upon between the parties in writing and, in the absence of an agreement, before the appointed day - together with the proviso, that in no case shall the period agreed upon between the supplier and the buyer in writing exceed forty-five days from the day of acceptance or the day of deemed acceptance. Para 11 is not about s.15 at all: it records that s.18 provides for making a reference to the Facilitation Council by a party to a dispute with regard to any amount due under s.17. It arises in How Tax Law Is Read matters, on section MSMED s.15, section MSMED s.16, section MSMED s.2(n), section MSMED s.18 of the Income Tax Act 1961, and was decided by A.P. Thaker J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where there is such an agreement, the forty-five day cap in the proviso overrides any longer period the parties wrote down. Date the registration and date each invoice; do not work from the registration certificate alone. Do not cite this judgment for its disposition without checking it - the operative part could not be read (see the editor's note).
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision applying or doubting this judgment was located. Because the operative part was not reached, the judgment should be read in full before it is cited for anything beyond its statement of s.15. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The document truncates. Two retrievals were made; the second reached only as far as a passage on supervisory jurisdiction ending mid-sentence. The first retrieval reported that the award of 3 May 2019 was quashed for want of jurisdiction because respondent no. 3 registered after the transactions were complete. That account is consistent with the dates recorded in the judgment but it could not be confirmed against the operative paragraphs, and it is therefore not stated as the holding. Anyone relying on the disposition must read the judgment from the court's own record. The s.15 passages are the Court's restatement or reproduction of the statute and should be treated as such rather than as a construction of it. The paragraph numbering in this document is unstable across retrievals, so the paragraph numbers given for the forty-five day sentence should be checked before they are cited. A check against the document corrected the paragraph attributions: para 11 is about s.18, not s.15; para 14 carries only the fifteen-day limb, on a conjoint reading of s.15 and s.2(b), and not the forty-five day words; and the key quotation, previously pinned to para 14, sits in a later paragraph expressly reproducing the proviso. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Could not be established. The document available breaks off in the course of the Court's discussion of the scope of supervisory jurisdiction and does not reach the final order. What the Court states in the course of its reasoning is that, on a conjoint reading of s.15 and s.2(b) of the MSMED Act, s.15 casts an obligation upon the buyer to make payment to the supplier within the period agreed upon or within fifteen days of acceptance or deemed acceptance of the goods or services (para 14). In a later paragraph, returned as para 51 on the copy read, the Court reproduces the rest of the section - that payment is to be made on or before the date agreed upon between the parties in writing and, in the absence of an agreement, before the appointed day - together with the proviso, that in no case shall the period agreed upon between the supplier and the buyer in writing exceed forty-five days from the day of acceptance or the day of deemed acceptance. Para 11 is not about s.15 at all: it records that s.18 provides for making a reference to the Facilitation Council by a party to a dispute with regard to any amount due under s.17.
TaxSphere, “Anupam Industries Ltd v State Level Industry Facilitation Council”, https://taxnotice.vittsphere.com/caselaw/case/anupam-industries-v-state-level-industry-facilitation-council-s15-registration/ (validity last checked 2026-09-17)
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