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2023 (11) TMI 1017 - HC - GSTRefund claim - Transfer of amount paid as GST Cess in the GSTR-3B filings towards Cess dues under the Kerala Flood Cess - seeking permission to Petitioner to file Exhibit P-9 KFC-A form manually with the 1st Respondent - seeking declaration that the petitioner is not liable to pay interest on the Cess dues already paid as GST Cess - initial period of GST regime. HELD THAT - The case is of the initial period of the GST regime. There were genuine difficulties faced by the assessees/dealers and even tax experts in understanding the GST regime. The petitioner has committed a bona fide mistake of depositing the KFC in the wrong account along with its GSTR-3B instead of filing a KFC-A return for payment of the KFC. The petitioner has been refunded the said cess by the 3rd respondent on direction issued by this Court. However, the fact remains that the State was denied KFC from 1st August 2019 to 04.08.2022 - it appears that the petitioner has not been vigilant in responding to the notices issued to the petitioner, inasmuch as the notice of March 2021 remains unanswered by him. Considering this fact, the petitioner should pay the interest from 01.04.2021 to 31.07.2022 and is entitled to get a refund for the remaining period of interest paid by the petitioner. The present writ petition is disposed of with a direction to the 1st respondent to refund the interest portion to the petitioner after adjusting interest for the period from 01.04.2021 to 31.07.2022.
Issues involved:
The issues involved in this case are related to the payment of Kerala Flood Cess (KFC) under the GST Act, specifically regarding the transfer of the amount paid as GST Cess to the correct head, the manual filing of KFC-A form, liability for interest on Cess dues, and the appropriate writ, order, or direction necessary in the circumstances. Transfer of GST Cess to KFC: The petitioner, a registered dealer under the GST Act, mistakenly remitted the KFC along with GSTR-3B returns in the Central Government Cess Pool from August 2019 to July 2021. Upon realizing this error through notices issued by the respondents, the petitioner was instructed to file KFC-A returns and remit the dues in the correct head. Despite notices and representations, the petitioner did not act on the suggestions and filed a writ petition. As an interim measure, the court directed the refund of the amount paid for KFC to be made on proper application, which the petitioner complied with by remitting the KFC in Form KFC-A after the refund. Liability for Interest on Cess Dues: The petitioner argued that the payment of interest was necessary for the successful upload of KFC-A and payment of KFC, done under protest pending the final decision in the writ petition. The petitioner contended that as per Section 77 of the CGST Act and a judgment in a related case, they were not liable for interest. However, due to the necessity of paying interest to file KFC-A, the petitioner sought a refund of the interest paid. Court's Decision: The court acknowledged the challenges faced during the initial period of the GST regime and the petitioner's genuine mistake in depositing KFC in the wrong account. While the petitioner was refunded the cess, the court noted the State's loss of KFC revenue during the period. Considering the petitioner's lack of vigilance in responding to notices, the court ruled that interest should be paid from April 2021 to July 2022, with a refund for the remaining period of interest paid. The court directed the refund of interest within three weeks and relieved the petitioner from any penalty or late fee for the payment of KFC on the wrong head.
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