2021 (2) TMI 767 - HC - GST

Demand of interest under Section 50 of the JGST Act, 2017 - alleged irregular input tax credit availed - Petitioner has sought declaration that it is not liable to pay interest for such mistake in filing GSTR-3B for the month of July 2017 wherein inadvertently he had included the transitional credit amount of ₹ 3,11,43,255/- again though it was filed in GSTR TRAN-1 as transitional credit in terms of Section 140 of the Act - HELD THAT - Learned counsel for the respondents CGST and GSTN is allowed four weeks time to obtain instructions and file counter affidavit. One week thereafter is allowed to the petitioner to file reply thereto, if so advised. Addition of parties be made by 19th February 2021. Office to place the file for inspection and addition of parties on requisition being made within the same time. Post the matters in the week of 5th April, 2021.

Summary

Issues:
1. Quashing of letters dated 6th November 2018 and 28th January 2019 issued by the respondent Superintendent of CGST & CX.
2. Declaration of non-liability to pay interest for a mistake in filing GSTR-3B.
3. Protection from coercive action against the petitioner.
4. Challenge against refund sanction order dated 9th November 2018 and order dated 31st January 2020.
5. Availing transitional credit under GSTR TRAN-1 and reversal of the same.
6. Impleading CGST and GSTN as respondents in the writ petitions.

Analysis:
1. The petitioner sought the quashing of letters dated 6th November 2018 and 28th January 2019 issued by the Superintendent of CGST & CX, challenging the demand for interest due to alleged irregular input tax credit. The petitioner claimed that a mistake in filing GSTR-3B led to the inclusion of transitional credit, seeking protection from coercive action.

2. In a related matter, the petitioner challenged a refund sanction order dated 9th November 2018 and an order dated 31st January 2020, objecting to the adjustment of refund against the interest demand. The petitioner contested the rejection of the appeal against the refund sanction order.

3. The petitioner's counsel argued that the transitional credit claimed under GSTR TRAN-1 was not utilized for output tax liability until July 2018, emphasizing the lack of reversal process for the erroneous credit in GSTR-3B at the relevant time. Therefore, the counsel contended that no interest liability should apply under Section 50(3) of the Act.

4. The court allowed the petitioner to implead CGST and GSTN as respondents in the writ petitions, with directions for serving copies of the petition and filing necessary documents by specific dates. The respondents were granted time to provide instructions and file counter affidavits, with a subsequent deadline for the petitioner to respond. The court scheduled the next hearing for the week of 5th April 2021.