2022 (4) TMI 1520 - HC - GST

Interest for delayed payment - Petitioner had merely deposited the amount in the Electronic Cash Ledger but did not accept it as a tax liability and deposited by furnishing GSTR-3B Return - whether this can be considered as payment of tax and interest need not be demanded as per Section 50 of the Central Goods and Service Tax Act, 2017 - Petitioner is a Semi Government Agency - HELD THAT - In the Petition and rejoinder the Petitioner has placed on record various factual aspects to demonstrate that for some period the Petitioner may have made the payment late but for substantial period the Petitioner has not defaulted in making payment in time. The learned Counsel for the Petitioner points out to us that there is no distinction made between this period in the impugned order and the Petitioner is liable to pay the interest for the entire period i.e. from February 2020 to January 2021. In the rejoinder, the Petitioner has placed before us a chart to demonstrate that periodical payments made during this period was as per the prescribed period specified under Section 50 of the CGST Act, 2017. The Petitioner has also sought to contend that the amounts which were available to the Petitioner as the Input Tax Credit should be considered while calculating the liability under Section 50 of the CGST Act, 2017. This aspect is also not considered by the Deputy Commissioner. The learned Counsel for the Respondents has sought to contend that availability of the Input Tax Credit cannot be considered for the purpose of Section 50 of the CGST Act, 2017 - both, the mentioned factual aspect and legal aspect having been not considered and considering the fact that the Petitioner is a Semi Government Agency, the matter needs to be re-examined by the Deputy Commissioner. Petition disposed off by way of remand.

Summary

Issues:
1. Liability of the Petitioner to pay interest for delayed payment under Section 50 of the CGST Act, 2017.
2. Consideration of Input Tax Credit while calculating liability under Section 50 of the CGST Act, 2017.
3. Examination of factual and legal aspects not considered by the Deputy Commissioner in the impugned order.
4. Direction for re-examination of the matter by the Deputy Commissioner in light of the above aspects.

Analysis:

1. The Petitioner, an undertaking of the Government of Maharashtra, engaged in cotton growing activities, approached the High Court challenging an order by the Deputy Commissioner of CGST directing payment of interest for delayed tax payment. The Commissioner contended that the Petitioner had not accepted the amount deposited in the Electronic Cash Ledger as a tax liability, leading to the imposition of interest under Section 50 of the CGST Act, 2017.

2. The Petitioner argued that the payment made by furnishing GSTR-3B Return should be considered as payment of tax. Additionally, the Petitioner highlighted that while there may have been delays in some payments, overall compliance was maintained. The Petitioner also raised the issue of considering Input Tax Credit in calculating the liability under Section 50, which was not addressed by the Deputy Commissioner.

3. The High Court noted that both factual and legal aspects, including the distinction between periods of delayed payment and compliance, as well as the consideration of Input Tax Credit, were not adequately addressed in the impugned order. The Court emphasized the need for a re-examination of the matter by the Deputy Commissioner to take into account these crucial aspects.

4. Consequently, the High Court disposed of the Writ Petition by directing the Deputy Commissioner to provide the Petitioner with an opportunity to present their case, hear their representative, and then pass a suitable order. The impugned order was to be considered as a prima facie opinion, with a prohibition on coercive actions against the Petitioner until the final order was issued. The Court's decision aimed to ensure a fair and thorough reconsideration of the matter in light of the overlooked factual and legal complexities.