2021 (1) TMI 249 - HC - GST

Recovery of interest payable on delayed payment of tax - whether the interest chargeable thereupon would accrue from the date of deposit of the tax or from the date of filing of the return? - petitioner during course of submissions, seeks to confine his consequential reliefs to the financial year 2017-18 while seeking liberty to assail the respective demand notices for the years 2018-19 and 2019-20 in separate writ petitions - Section 79 of the CGST Act read with Section 75(12). HELD THAT - Learned counsel for the respondents CGST and the State of Jharkhand both pray for and are allowed four weeks' time to file counter affidavit. Rejoinder, if any, be filed within two weeks thereafter. Matter be listed after six weeks.

Summary

Issues:
Challenge to circular on interest payable on delayed tax payment under CGST Act, validity of circular, recovery process under Section 79, disputed interest liability computation, aggrieved petitioner seeking relief, multiple reliefs for different financial years, filing of counter affidavit by respondents.

Analysis:
The primary challenge in the writ petition is against a circular issued by the Central Board of Indirect Taxes and Customs regarding the recovery of interest on delayed tax payments under the CGST Act. The petitioner's counsel argued that the circular could lead to automatic recovery of interest without proper adjudication, leaving no remedy for the assessee. The petitioner questioned the validity of the circular on various grounds, highlighting potential issues in interest computation when tax payment is delayed after filing the return. The petitioner, aggrieved by the circular, sought relief through the writ petition, including quashing of demand notices for different financial years.

During the submissions, the petitioner's counsel requested to limit the consequential reliefs to the financial year 2017-18, with the intention to challenge demand notices for subsequent years separately. The court allowed this request, emphasizing that multiple reliefs for different financial years should not be combined in one writ petition to avoid inconvenience. The respondents representing CGST and the State of Jharkhand were granted four weeks to file a counter affidavit, with an additional two weeks for any rejoinder. The matter was scheduled to be listed after six weeks, with instructions for the parties to submit written notes and decisions they intend to rely on before the listing date.

In conclusion, the judgment addressed the challenge to the circular on interest recovery, the disputed interest liability computation issue, and the petitioner's request for relief. The court allowed the petitioner to pursue separate challenges for different financial years, emphasizing procedural clarity. The respondents were given time to respond, ensuring a fair opportunity for all parties to present their arguments before the court.