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2023 (12) TMI 69 - HC - GSTDemand of interest payable under Section 50 (1) of the CGST/SGST Act, 2017 - GST returns could not be filied due to cancellation of GSTIN of the petitioner - HELD THAT - The petitioner cannot be held responsible for cancellation of the GSTIN on 24.08.2017. The petitioner immediately approached to the GST authorities on 24.08.2017 itself by way of an e-mail bringing into the notice of the authorities about the cancellation of the GSTIN and on such request no action was taken till the petitioner filed petition before this Court, and only in pursuance of the interim order passed by this Court on 21.12.2017 the GSTIN of the petitioner got restored. The petitioner had thereafter, filed return for the months of July, 2017 to December, 2017 and paid tax. Thus, the demand for interest for delay in filing the returns and payment of tax due for the period from July, 2017 to December, 2017, this Court is of the view that the it is highly inequitable to impose interest under Section 50 of the Income Tax Act, 2017 on the petitioner, and petitioner can not be said to have made any default in not remitting the tax inasmuch as he could not have remitted the tax without there being a valid GSTIN. However, if the petitioner had failed to remit the tax after 26.12.2017, within twenty days thereafter, the petitioner would be liable to pay the interest under Section 50 of the CGST/SGST Act, 2017. The impugned order is set aside and the authorities are given liberty to impose fine for delayed payment of GST after 20th day from 26.12.2017 for the period up to December, 2017. for subsequent months, if there is any delay, the petitioner is liable to pay the interest - Petition disposed off.
Issues:
The issues involved in the judgment are the cancellation and restoration of GSTIN, delay in filing returns and payment of tax, and imposition of interest under Section 50 of the CGST/SGST Act, 2017. Cancellation and Restoration of GSTIN: The petitioner's GSTIN was cancelled on 24.08.2017 without notice, leading to inability to file returns for July 2017. The petitioner sought reactivation, which was done after a court order on 26.12.2017. The court held that the petitioner cannot be held liable for delay during the period without a valid GSTIN. Delay in Filing Returns and Payment of Tax: Due to the cancellation, the petitioner couldn't file returns for July to December 2017 until the GSTIN was restored. After restoration, the petitioner filed returns with minimal delays. The court found it inequitable to impose interest for this period as the delay was due to the cancellation of GSTIN. Imposition of Interest under Section 50: The respondent argued that the petitioner, after collecting tax, delayed payment to the government, justifying interest under Section 50. However, the court noted that the delay was a result of the cancellation of GSTIN and subsequent restoration. The court ruled that interest could only be imposed for delays after 26.12.2017, giving the petitioner time to comply. Conclusion: The court set aside the impugned order and allowed authorities to impose fines for delayed payments after 20th day from 26.12.2017 for the period up to December 2017. For subsequent months, interest could be levied if there are delays. The petitioner was instructed to remit any interest upon receiving a fresh notice for delays post-restoration of GSTIN.
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