2022 (4) TMI 748 - HC - GST

Liability of interest based on the amount available / credited in the Electronic Cash Ledger (in excess of the previous month liabilities) as date of payment of tax instead of date of filing of the GSTR-3B returns - statutory due by way of interest can be recovered from the petitioner, or not - HELD THAT - In the impugned demand itself what is the due date payable for the tax has been provided, i.e., 20th of next month and when actually the amount has been paid also stated. For instance, petition which relates to the Assessment Year 2020-21, for the month of July, August, September and October, the petitioner paid the tax in time, i.e., on 20th day of the next month, therefore, no interest was calculated and demanded. For the rest of the period, since there was a delay ranging from 7 days to 196 days, depending upon the delayed payment, the interest was calculated and demanded. It becomes a mandatory one that for the belated payment of the tax, the taxpayer is liable to pay the interest, the maximum percentage of the interest shall be 18% - assuming that the petitioner has made e-payment through Bank of the petitioner in the credit of the Government Account, when actually that credit has been made in respect of each of the month was the question asked, for which the learned counsel appearing for the petitioner has relied upon calculation sheet. In this regard, for instance, the Assessment Year 2020-21 is concerned, for the month of April 2020, they say that, they deposited on 27.06.2020, correspondingly in every month, there might be some delay except one or two month, even according to the calculation memo given by the petitioner side. In Section 107 of the Act, it is made clear that, any person aggrieved by any decision or order passed under this Act by an Adjudicating Authority may appeal to such Appellate Authority within three months from the date on which, the said decision or order is communicated to such person - even though the impugned demands are claimed as notice for belated payment of tax, in all practical purposes, it is only a decision since the impugned communication has made it clear that, the registered person is requested to pay the amount immediately, therefore, it is a final decision which is reflected in the demand which is impugned herein. Hence, against such decision, the petitioner can very well file an Appeal under Section 107 of the Act, within a period of three months. Since these orders impugned was passed only on 05.01.2022, the petitioner is having limitation to file an Appeal and therefore, this Court feel that, these writ petitions can be rejected with a liberty to the petitioner to file Appeal against the impugned orders within the limitation period - petition dismissed.

Summary

Issues Involved:
- Writ of Certiorarified Mandamus for belated payment of tax demand interest
- Interpretation of Section 50 of the TNGST Act, 2017
- Freezing of petitioner's bank accounts
- Maintainability of the writ petitions

Analysis:

Writ of Certiorarified Mandamus for Belated Payment of Tax Demand Interest:
The petitioner sought a writ of Certiorarified Mandamus to challenge the demand for interest on belated tax payments issued by the Revenue. The petitioner argued that the date of credit to the Government's account should be considered as the date of tax payment, not the filing date of GSTR-3B returns. The petitioner contended that the demand notices were flawed as they did not consider the actual payment dates. The Revenue justified the demands based on delayed payments and highlighted that interest is statutory and can be recovered. The Court examined the due dates and actual payment dates for each month, emphasizing the statutory requirement under Section 50 of the Act for interest on belated tax payments.

Interpretation of Section 50 of the TNGST Act, 2017:
Section 50 mandates interest payment for delayed tax payments, with a maximum rate of 18%. The Court clarified that the taxpayer is obligated to pay interest for belated tax payments. The petitioner's argument regarding the date of credit to the Government's account was considered, but the Court emphasized that factual disputes should be addressed by the Appellate Authority. The Court highlighted the availability of the appeal remedy under Section 107 of the Act for challenging such decisions.

Freezing of Petitioner's Bank Accounts:
The petitioner's counsel raised concerns over the freezing of the petitioner's bank accounts due to the impugned demands. The petitioner's business was adversely affected by the account freeze. However, the Court did not delve into the freezing issue extensively, focusing more on the legality of the demand notices and the appeal process.

Maintainability of the Writ Petitions:
The Government Advocate argued that the petitioner should have pursued the appeal process under Section 107 of the Act before approaching the Court with writ petitions. The Court agreed that factual matters regarding tax payments should be addressed through the appellate route. The Court dismissed the writ petitions but granted the petitioner liberty to file an appeal within the statutory limitation period.

In conclusion, the Court dismissed the writ petitions, emphasizing the importance of utilizing the appeal mechanism provided under the law for challenging tax-related decisions. The judgment highlighted the statutory requirements for interest on belated tax payments and the need to address factual disputes through the appropriate appellate channels.