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2023 (2) TMI 722 - HC - GSTLevy of Interest - non payment of the credit component - petitioner claims that they are not liable to pay any interest as per the impugned demand on the ground that only in respect of the cash component mentioned in the impugned demand, they are liable to pay interest - HELD THAT - The issue as to whether an assessee is liable to pay any interest for the alleged non payment of the credit component is covered by the decisions of two learned Judges of this Court in the case of M/S. SRI PRIYANGA AGENCIES REP. BY ITS PROPRIETOR V. SRIDEVI VERSUS THE ASSISTANT COMMISSIONER OF CGST CENTRAL EXCISE VILLUPURAM, THE SUPERINTENDENT OF CGST CENTRAL EXCISE VILLUPURAM, THE BRANCH MANAGER LAKSHMI VILAS BANK LTD. 2022 (12) TMI 1372 - MADRAS HIGH COURT in the case of M/s.Refex Industries Limited vs. The Assistant Commissioner of CGST Central Excise and two others 2020 (2) TMI 794 - MADRAS HIGH COURT , wherein they have interpreted and explained Section 50(1) of the GST Act, 2017 - The learned judges have held in clear terms that Section 50 of the GST Act can be applied demanding interest only in cases of belated cash payment towards GST, but not on input tax credit available all the while with the department to the credit of the assessee. Writ petitioner to demonstrate to the satisfaction of Respondents 1 and 2 undisputed payments (if any) within three weeks from today i.e., on or before 28.02.2023 - On demonstration to the satisfaction of respondents 1 and 2 (as above), the impugned notice will stand set aside - Petition disposed off.
Issues:
Challenge to impugned notices dated 22.01.2020 and 15.07.2019, Bank attachment notices dated 12.02.2020, Liability to pay interest on cash and credit components, Interpretation of Section 50(1) of the GST Act, 2017. Impugned Notices: Two writ petitions were filed challenging the impugned notices dated 22.01.2020 and 15.07.2019 issued by the 1st respondent. Additionally, bank attachment notices dated 12.02.2020 under Section 79(1)(c) of the CGST Act, 2017 were issued by the 2nd respondent. The petitioner contested the demand for interest amounting to Rs.55,16,274/-, arguing they were only liable for interest on the cash component, not the credit component. Liability for Interest: The main issue revolved around the liability to pay interest for non-payment of the credit component. The petitioner claimed they were not liable for interest on the credit component, citing precedents set by two learned Judges of the Court. These judgments clarified that interest under Section 50 of the GST Act is applicable only for belated cash payment, not on available input tax credit of the assessee. Court's Decision: The Court concurred with the interpretation provided by the two learned Judges regarding the application of Section 50 of the GST Act. Consequently, the Court issued directions for the writ petitions, requiring the petitioner to demonstrate undisputed payments within a specified timeframe. If the demonstration satisfied the respondents, the impugned notices would be set aside; otherwise, the petitions would be dismissed. The respondents were instructed to consider the petitioner's stand and communicate their decision within a week if the demonstration was successful. Further Directions: In addition to the above, if the petitioner paid interest on the cash component as determined by the respondent, the order of attachment on the petitioner's bank account was directed to be lifted. The Court disposed of the writ petitions with the issued directions, emphasizing that no costs were to be incurred. This comprehensive analysis of the judgment outlines the issues raised, the arguments presented by the parties, the Court's interpretation of the law, and the final directions provided by the Court.
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