2021 (6) TMI 826 - Commissioner - GST

Failure to deposit the GST Liability - GST was collected from the customers - failure to pay interest on the GST deposited/debited - non-filing of returns - issuance of invoice for outward supply or not - Penalty under Section 122(2) (b) of CGST Act - HELD THAT - The appellant has issued the invoices for his whole outward supply and in the invoices he has charged the GST also. Therefore, it is very much obvious that liability of tax is arised upon the appellant at the time of issue of invoices and accordingly he should have to discharge his tax liability by filing the returns within the stipulated time but he did not do so. Hence he has violated the provisions of GST Act and rules made thereunder. Non-Filing of returns within stipulated time - HELD THAT - The appellant has filed its returns and discharged his tax liability for the period Dec-2017 to July-2018 only after initiation of investigation. Further, the assessee/appellant was defaulted to file the returns and discharge its tax liability within the stipulated time for earlier period i.e. July 2017 to Nov 2017 also. The appellant did not file the GSTR-3B return for subsequent period August-2018 to March-2019. The continuous failure of filing of returns and not discharging its tax liability within the stipulated time by the appellant itself indicate the ill intention of the appellant. Non filing of returns and non discharging of liability is clear cut violation/ contravention of provisions of Section 37,39,49,50 59 of CGST Act and rules made thereunder - the appellant has issued the tax invoices for its outward supplies to his customers mentioning the tax liability on its and as per provisions of Section 12 13 of CGST Act, tax liability is arise on the date of issuance of invoices only - thus, the appellant failed to discharge his tax liability with intent to evade the same. In the instant case, there is no doubt in the fact that the appellant is regular defaulter of the payment of tax and filing of returns which shows contraventions of the GST laws and rules made thereunder. This act of omission and commission itself establish the charge of suppression - any offence can not be proved without the records/documents of offender/ assessee/tax payer. In the instant case also investigating as well as adjudicating authority has established the demand with documentary evidence which were collected from him. Penalty under Section 122(2) (b) of CGST Act - HELD THAT - The contravention of the appellant has already been discussed in foregoing paras and it is established that he failed to deposit the tax within the stipulated time as provided in the GST Act and rules hence penalty under Section 122(2) (b) of CGST Act itself attracted in the instant case. The order passed by the adjudicating authority is proper and correct - Appeal disposed off.

Summary

Issues Involved:
1. Non-payment of interest on delayed GST payments for July 2017 to November 2017.
2. Non-payment/short payment of GST for December 2017 to March 2019.
3. Appropriation of Input Tax Credit (ITC) for the period August 2018 to March 2019.
4. Alleged suppression of facts and evasion of GST.
5. Imposition of penalty under Section 122 of the CGST Act, 2017.

Detailed Analysis:

1. Non-payment of Interest on Delayed GST Payments for July 2017 to November 2017:
The appellant failed to pay interest amounting to ?4,275/- (IGST ?428/-, CGST ?1,932/-, and SGST ?1,915/-) on delayed GST payments for the period July 2017 to November 2017. As per Section 50 of the CGST Act, 2017, interest on delayed payment of GST is recoverable. The adjudicating authority confirmed the recovery of this interest.

2. Non-payment/Short Payment of GST for December 2017 to March 2019:
The appellant did not file GSTR-3B returns for the period December 2017 to March 2019, resulting in a GST liability of ?91,20,399/- (IGST ?45,75,623/-, CGST ?22,72,388/-, and SGST ?22,72,388/-). The appellant had deposited ?36,83,299/- (IGST), ?11,23,195/- (CGST), and ?11,23,195/- (SGST) till date. The adjudicating authority confirmed the demand for the remaining GST liability.

3. Appropriation of Input Tax Credit (ITC) for the Period August 2018 to March 2019:
The appellant argued that the demand for the period August 2018 to March 2019 was calculated without considering available ITC amounting to ?15,19,500/- (IGST ?2,43,632/-, CGST ?6,37,934/-, and SGST ?6,37,934/-). However, as per Section 16(2) of the CGST Act, 2017, ITC can only be availed if returns are filed under Section 39. Since the appellant did not file GSTR-3B returns for the said period, ITC could not be considered. The adjudicating authority rightly confirmed the demand without considering ITC.

4. Alleged Suppression of Facts and Evasion of GST:
The appellant was found to have charged and collected GST from clients but failed to deposit it within the stipulated time, indicating suppression of facts and intentional evasion of GST. The adjudicating authority invoked Section 74 for recovery and imposed penalties under Section 122 of the CGST Act, 2017. The appellant's continuous failure to file returns and discharge tax liabilities within the stipulated time further established the charge of suppression.

5. Imposition of Penalty under Section 122 of the CGST Act, 2017:
The adjudicating authority imposed a penalty equal to the tax amount confirmed under Section 122(2)(b) of the CGST Act, 2017. The appellant argued against the imposition of penalties, citing liquidity issues and non-receipt of payments from customers. However, the adjudicating authority found that the appellant's failure to deposit tax within the stipulated time warranted the penalty.

Conclusion:
The adjudicating authority's order was upheld, confirming the demand for GST amounting to ?91,20,399/-, recovery of interest, and imposition of penalties. The appeal was rejected, and the appellant was directed to comply with the order.