2019 (9) TMI 690 - HC - GST

Waiver of interest and late fee imposed - It is the case of the petitioner that the interest has been levied upon the petitioner without entering into the adjudicatory process as required under Section 73 of the CGST Act 2017 - alternate remedy of appeal u/s 107 of CGST Act - Notification No. 76/2018 dated 31st December, 2018 - HELD THAT - As prayed for, learned counsel for the CGST is allowed four week s time to file the detailed counter-affidavit in the matter - Till then, the operation of the order dated 22.05.2019, as contained in Annexure-10 to the supplementary affidavit, shall remain stayed. Put up the matter on 28.08.2019, awaiting the counter-affidavit in the matter.

Summary

Issues:
1. Interest levied on petitioner for delayed GSTR-3B Returns filing.
2. Allegation of interest imposition without following adjudicatory process.
3. Interpretation of Notification No. 76/2018 regarding late fee waiver.
4. Stay on operation of the order dated 22.05.2019.

Analysis:
1. The petitioner was burdened with an interest amount of ?19,59,721 for filing delayed GSTR-3B Returns for February and March 2018. Despite filing the returns in September 2018, interest was imposed by an order dated 18.03.2019. The petitioner's bank account was attached for non-payment of this interest. The due date for the returns was 31.03.2019, as evidenced by screen shots from the GSTN Portal, which were not contested by the counsel for CGST.

2. The petitioner contended that the interest was imposed without following the adjudicatory process mandated by Section 73 of the CGST Act 2017. The petitioner also highlighted the availability of an appeal remedy under Section 107 of the Act. The petitioner's argument implies a lack of due process in the imposition of interest, raising concerns about procedural fairness.

3. A Notification No. 76/2018 dated 31st December, 2018, was cited to show the waiver of late fee for certain late filers of GSTR-3B returns. However, the petitioner had filed the returns before the specified waiver period. The counsel for CGST clarified that the notification pertained only to late fee waiver and not to interest, indicating a distinction between the two components.

4. The court granted the counsel for CGST four weeks to file a detailed counter-affidavit. During this period, the operation of the order dated 22.05.2019, which led to the attachment of the petitioner's bank account, was stayed. The respondent authorities were permitted to initiate the adjudicatory process under Section 73 of the CGST Act if deemed necessary. The case was scheduled for further proceedings on 28.08.2019 pending the submission of the counter-affidavit.