2024 (4) TMI 949 - HC - GST

Penalty for Non-filing of monthly return - Seeking permission to file GSTR 3B Return - Seeking refund of amount illegally debited from the Electronic Cash Ledger towards interest and penalty - HELD THAT - Whatever be the true facts, this much is clear that the petitioner had initiated the payment of tax for the month of April, 2023 within time, in the manner prescribed. The amount was debited from its account, within prescribed time. To that extent, failure may never be attributed to the petitioner- in timely payment of the tax amount. The levy of late fee (Section 47) and interest (Section 50) under U.P. GST Act, 2017 may arise only in the event of failure on the part of an assessee to file a return and/ or payment of due tax within time. Insofar as the delay may be attributed exclusively to the respondent-bank after such payment was made by the petitioner within time, on that statement itself the levy of penalty remains unwarranted. What errors may have been committed by the bank/ or GSTN may not involve the petitioner. Thus, leaving it open to the GSTN and the Bank to device a better mechanism to ensure prompt credit and debit entries to arise in real time as may not create any doubts or disputes in future, the present writ petition stands disposed of as below. The amount of penalty Rs. 1,07,710.51/- and interest Rs. 100/- deposited by the petitioner under protest may be adjusted against the tax liability for the month of April, 2024 onwards without incurring any liability as to interest on that amount.

Summary

Issues involved:
The issues involved in this judgment are related to timely filing of GSTR 3B Return for the month of April, 2023, refund of interest and penalty debited from the Electronic Cash Ledger of the petitioner, and discrepancies in the payment process involving the bank and GSTN.

Timely Filing of GSTR 3B Return:
The petitioner sought relief through a writ petition to file its GSTR 3B Return for April, 2023 within time. It was noted that the petitioner had made a deposit of the interest and penalty amount for alleged non-filing of the monthly return. The payment of tax for April, 2023 was initiated within time as per the bank's records, and the amount was debited from the petitioner's account promptly. The court observed that any delay in crediting the amount to the GSTN should not be attributed to the petitioner, as the failure to file a return and pay tax within time could lead to late fees and interest under the U.P. GST Act, 2017.

Discrepancies in Payment Process:
There were discrepancies between the bank's statement and the GSTN's affidavit regarding the timing of the tax payment for April, 2023. The bank claimed that the amount was credited to the Tax Pooling Account on a specific date and time, while the GSTN stated that the amount was credited later. Despite these discrepancies, it was acknowledged that the petitioner had initiated the payment within the prescribed time and the delay could be attributed to the bank or GSTN. The court emphasized the need for a better mechanism to ensure real-time credit and debit entries to avoid future doubts or disputes.

Refund of Penalty and Interest:
The court disposed of the writ petition by directing that the penalty and interest amount deposited by the petitioner under protest should be adjusted against the tax liability for April, 2024 onwards. The petitioner was relieved from incurring any further liability as to interest on that amount. This decision was made considering that the delay in crediting the amount to the GSTN was not due to any fault of the petitioner, and the levy of penalty remained unwarranted in this case.