2024 (9) TMI 501 - HC - GST

Levy of interest - case of petitioner is that he had made payment of its tax liability from the credit ledger and having regard thereto, no interest can be levied on the petitioner - HELD THAT - From the bare perusal of the show-cause notice in form GST DRC 01 dated 4th December, 2023 for the tax period from April 2021 to March 2022 it transpires although the petitioner claims to have responded to the show-cause and the reflection thereof is available in the impugned order, the petitioner has chosen not to annex such reply. The petitioner however, insists that this Court should go into the merits of the case and by proceeding on the premise that I.T.C. was available to the credit of the petitioner should set aside the order including the demand raised by the respondents in form GST DRC 07 dated 25th January, 2024 - there are factual issues, which may require detailed scrutiny of records. It is noticed that the statute itself incorporates not only one but two several appellate authorities, one right of appeal succeeding another. Though, the Appellate Tribunal under the said Act is yet to be constituted, the first appellate authority is very much functional. The writ petition cannot be entertained and accordingly fails.

Summary

Issues:
Challenge to order under Section 73 of WBGST/CGST Act, 2017 for tax period April 2021 to March 2022. Levying of interest on tax liability despite payment from credit ledger. Interpretation of Section 50 of the Act regarding interest on belated cash payment. Alternative remedy of appeal before Appellate Authority. Timeliness of filing writ petition.

Analysis:
The petitioner challenged an order passed under Section 73 of the WBGST/CGST Act, 2017 for the tax period April 2021 to March 2022, primarily contesting the imposition of interest on the tax liability despite payment from the credit ledger. The petitioner argued that interest should not be levied as the credit was available in the ledger at the time of liability. Reference was made to a judgment by the Madras High Court, emphasizing that interest is for belated cash payment, not for available Input Tax Credit (I.T.C.). The petitioner sought relief based on this interpretation, similar to the case of M/s. Refex Industries Limited.

The respondent contended that the petitioner had an alternative remedy through an appeal before the Appellate Authority and urged the court not to entertain the writ petition on this ground. It was argued that the judgment in the Refex Industries case was factually distinguishable and should not influence the present case. The court acknowledged the existence of multiple appellate authorities under the statute, with the first appellate authority currently functional despite the Appellate Tribunal not being constituted yet.

The court noted that the writ petition was filed more than five months after the impugned order, without a satisfactory explanation for the delay. Considering the availability of an alternative remedy and the timeliness of the petition, the court concluded that there was no scope to entertain the writ petition. The petitioner was directed to approach the Appellate Authority within three weeks, with a directive for expedited consideration and disposal of the appeal, preferably within eight weeks from the date of the court's order. The writ petition was disposed of, emphasizing that the petitioner should not be left without recourse, especially in light of the pending constitution of the Appellate Tribunal.