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TMI Blog2020 (2) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... to the credit of the assessee. The latter being available with the Department is, thus, neither belated nor delayed. Proviso to Section 50(1), as per which interest shall be levied only on that part of the tax which is paid in cash, has been inserted with effect from 01.08.2019, but clearly seeks to correct an anomaly in the provision as it existed prior to such insertion. It should thus be read as clarificatory and operative retrospectively. Petition allowed - decided in favor of petitooner. - Writ Petition Nos.23360 and 23361 of 2019 And WMP Nos.23106 and 23108 of 2019 - - - Dated:- 6-1-2020 - Dr. Justice Anita Sumanth For the Petitioner in both W.Ps : Mr.R.Anish Kumar For the Respondents in both W.Ps : Mr.Thirumalaisamy COMMON ORDER The petitioners are registered as assessees under the provisions of the Central Goods and Service Tax Act, 2017 (in short 'CGST Act'). The petitioners have admittedly filed Returns of income belatedly for the period 2017-18. Communications dated 07.05.2019 (in W.P.No.23360 of 2019) and 15.05.2019 (in W.P.No.23361 of 2019) computing the delay in filing of Returns and consequently the interest to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber -17 134 268898 17769 6. January 18 181 13535680 1208199 7. February 18 155 12103153 925145 8. March 18 143 7750 547 Total 2362746 2. Demand notices were issued to the Banks (R3) seeking to recover the arrears of interest from the balances in the accounts of the petitioners. 3. The petitioners objected stating that they had sufficient Input Tax Credit (ITC) available with the Department and thus interest could be demanded, if at all, only on the cash component of the tax remitted belatedly. This amounted to a sum of ₹ 1,21,701/- (in W.P.No.23360 of 2019) and ₹ 1,25,751/-(in W.P.No.23361 of 2019) and the amounts have been remitted on 14.06.2019. According to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration is as to whether interest on belated payment of tax as contemplated under Section 50 of the CGST Act is automatic or whether the same would have to be determined after considering the explanation offered by the assessee. At paragraph 29, the Hon'ble Judge holds that the liability to pay interest under Section 50 is automatic. However, since the petitioner in that case had raised disputes with regard to the period for which the tax had allegedly not been paid, as well as the quantum of tax remaining unpaid in excess of ITC, all being questions of fact, he was of the view that such matters would have to be resolved after hearing the assessee. He categorically states 'therefore in my considered view though the liability fastened on the assessee to pay interest is an automatic liability, quantification of such liability certainly needs an arithmetical exercise after considering the objections if any, raised by the assessee.' The objections raised in that case are thus factual and relate to disputed questions of fact as noted by me in the earlier portion of this paragraph. 9. However, the objection raised by the petitioners before me is not one of fact but on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re me is as to whether in a case such as the present, where credit is due to an assessee, payment by way of adjustment can still be termed 'belated' or 'delayed'. The use of the word 'delayed' connotes a situation of deprival, where the State has been deprived of the funds representing tax component till such time the Return is filed accompanied by the remittance of tax. The availability of ITC runs counter to this, as it connotes the enrichment of the State, to this extent. Thus, Section 50 which is specifically intended to apply to a state of deprival cannot apply in a situation where the State is possessed of sufficient funds to the credit of the assessee. In my considered view, the proper application of Section 50 is one where interest is levied on a belated cash payment but not on ITC available all the while with the Department to the credit of the assessee. The latter being available with the Department is, in my view, neither belated nor delayed. 13. The argument that ITC is liable to be reversed if it is found to have been erroneously claimed, and that it may be invalidated in some situations, does not militate with my conclusion as aforesaid. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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