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TMI Blog2020 (4) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Act and Rules. Thus, a bare reading of Section 73(1) would reveal that if tax has not been paid or has been short paid, a notice is required to be served by the Proper Officer on the assesse not only requiring him to show cause as to why tax be not recovered from it, but also specifying in the notice the interest payable under Section 50 also to be recovered along with penalty. Thus, if there is a short payment of tax or non- payment of tax, a notice is required to be issued even for recovery of interest under Section 50 of the CGST Act. This Court, while interpreting the term tax not paid has held that if a tax has not been paid within the prescribed period, the same would fall with the expression tax not paid as mentioned under Section 73 of the CGST Act. The aforesaid interpretation further finds support from other sub- sections of Section 73, particularly sub-sections (5), (6) and (7) of Section 73 - On going through entire section 73, it would be evident that even in a case where an assesse files his return as per his own ascertainment, pays the tax and even pays interest, but if the said amount paid by the assesse is falling short of the amount actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n process either u/s 73 or 74 of the CGST Act in the event of an assesse raising dispute towards liability of interest? (ii) Whether recovery proceedings u/s 79 of the CGST Act can be initiated for recovery of interest u/s 50 of the said Act without initiation and completion of the adjudication proceedings under the Act? 2. The facts of the present writ application lie in a very narrow compass. The petitioner, being a partnership firm, was registered under the provisions of the CGST Act. Under Section 39 of the CGST Act, provisions have been incorporated for furnishing of monthly return by a registered person on or before 20th day of the month succeeding such calendar month in which returns were to be filed. Said returns are known as 'GSTR-3 Return'. However, it is an admitted fact that due to the Nationwide problem in GSTN Portal, said GSTR-3 Return, which is an auto populated return on the basis of details of inward and outward supply, is not being generated, due to which, by way of stop-gap arrangement, provisions have been incorporated for filing GSTR-3B Return in terms of Rule 61(5) read with Rule 61(6) of the Central Goods and Services Tax Rules, 2017 (for sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by respondent No.3 demanding interest amount of ₹ 19,59,721/- on the alleged ground of delay in submitting GSTR-3B Return for the months of February and March, 2018, is not sustainable in the eyes of law, as the said amount of interest has been determined without initiating any adjudication process under Sections 73 or 74 of the CGST Act. It is the specific case of the petitioner that the petitioner is not liable to pay interest as there has been no delay on its part in furnishing of GSTR-3B Return and, consequentially, there is no delay on its part in depositing the tax with the respondent- Authority, as in GSTN Portal, due date for furnishing of return for the months of February and March, 2018 was shown as 31st March, 2019. 7. It has been further argued by Mr. Gadodia that if the amount of interest is not admitted by an assesse, the same requires determination through an adjudication process to be initiated as per the detailed provisions contained under Section 73 of the CGST Act. 8. It has been further submitted by the learned counsel for the petitioner that not only that respondent-Authorities, without initiating adjudication process, have straightaway deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable in the instant case, as it relates only to demand and recovery of tax not paid or short paid either on account of fraud or willful misstatement or suppression of facts, or otherwise. It has been further contended by the respondents that due date as reflected in GSTN Portal as 31 st March, 2019 for furnishing of GSTR-3B monthly return for the months of February and March, 2018 was reflecting owning to the fact that Central Government, through Central Board of Indirect Taxes and Customs, vide Notification No. 76/2018-Central Tax dated 31st December, 2018 (Annexure -3 series) has waived the levy of late fee for furnishing returns for the months of July, 2017 to September, 2018, if the said returns were furnished between the period 22nd December, 2018 to 31st March, 2019, and the said Notification cannot be interpreted to mean that the last date of filing of GSTR-3B Return has been extended up to 31st March, 2019. Learned counsel for the revenue, in support of his contention that liability for payment of interest is automatic and does not require any adjudication process, has relied upon the following two decisions, namely;-- (1) 2004 (5) SCC 472 (U.P. Cooperative Cane Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 22.05.2019 (Annexure-10 of the Supplementary Affidavit) and directed the respondents to file their counter affidavit. 14. At this stage, we may indicate here that this Court is not expressing any opinion as to whether the petitioner was liable to pay interest or not, which, in the opinion of the Court, is required to be adjudicated first by the Revenue Authorities. However, the aforesaid facts are noted by us in our Judgment for the limited purpose to indicate that there was a dispute between the Assessee-Petitioner and the Revenue regarding liability of interest for alleged delayed filing of monthly return for the months of February and March, 2018 and, consequentially, alleged delay in payment of tax. 15. In the backdrop of the aforesaid fact, we proceed to decide the main issues involved for adjudication in the instant writ application, which have already been delineated hereinabove. For the purpose of adjudicating the said issues, it would be relevant to quote some of the provisions of the CGST Act, which are as under:- Section -39 39. Furnishing of returns (1) Every registered person, other than an Input Service Distributor or a non-resident taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmendations of the Council. Section 73 73. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized for any reason, other than the reason of fraud or any willful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub- section (10) for issuance of order. (3) Where a notice h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongly availed or utilized relates to or within three years from the date of erroneous refund. (11) Notwithstanding anything contained in sub-section (6) or sub-section (8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax. (Emphasis Supplied) 16. A bare reading of the provisions of Section 39(1) read with Section 39(7) of the CGST Act would reveal that a dealer is liable to pay tax within 20th day of the succeeding month for which the dealer was liable to file his monthly return. 17. Further, Section 50 of the Act contains provisions relating to Levy of Interest on delayed payment of tax. A reading of sub-section (2) of Section 50 itself would reveal that interest payable under sub-section (1) of Section 50 is required to be calculated in such manner, as may be prescribed. 18. However, the important issue for consideration in the instant writ application is the interpretation of the provisions of Section 73 of the Act. A bare reading of Section 73(1) of the Act reveals that where it appears to the Proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le interpreting the term tax not paid has held that if a tax has not been paid within the prescribed period, the same would fall with the expression tax not paid as mentioned under Section 73 of the CGST Act. The aforesaid interpretation further finds support from other sub- sections of Section 73, particularly sub-sections (5), (6) and (7) of Section 73. A bare reading of the aforesaid sub-sections (5), (6) and (7) of Section 73 would reveal that a person chargeable with tax, if before service of notice pays the amount of tax along with interest payable thereon under Section 50 of the Act on the basis of his own ascertainment, then the Assessing Officer, if satisfied that correct tax along with interest has been paid by the said assesse, shall not issue any notice under Section 73(1) of the Act. However, Section 73(7) of the Act provides that if an assesse, who has itself on his own ascertainment, deposited the tax along with interest, but if in the opinion of the Proper Officer, the amount paid on own ascertainment falls short of the amount actually payable, then a notice would be issued by the said Proper Officer under Section 73 (1) of the Act for recovery of the actual amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the interest on his own for the period for which the tax or any part thereof remains unpaid. The liability to pay interest is evidently fastened on the assesse and the same has to be discharged on his own. Thus, there cannot be any two view on the liability to pay interest under Section 50(1) of the said Act. In other words, such liability is undoubtedly an automatic liability fastened on the assesse to pay on his own for the period for which tax or any part thereof remains unpaid. 28. Sub-section (2) of Section 50 contemplates that the interest under Sub-section (1) shall be calculated in such manner as prescribed from the day succeeding the day on which such tax was due to be paid. Sub-section (3) of Section 50 further contemplates that a taxable person who makes an undue or excess claim of input tax credit under Section 42(10) or undue or excess reduction in output tax liability under Section 43 (10) shall have to pay interest on undue or excess claim or such undue or excess reduction, at the rate not exceeding 24 percent. 29. A careful perusal of sub Sections (2) and (3) of Section 50 thus would show that though the liability to pay interest under Section 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d determine such quantum, the objections raised by each petitioners shall have to be, certainly, considered. Undoubtedly unilateral quantification of interest liability cannot be justified especially when the assesse has something to say on such quantum. The Writ Court, thus, in the above line, has disposed the writ petitions, that too, on a condition that the petitioner in each case should pay the admitted liability of interest. 33. A careful perusal of the direction issued by the Writ Court does not indicate anywhere as to how the Revenue is prejudiced by the said order, especially when the Revenue is given liberty to pass an order in a manner known to law and communicate the same to the petitioners, after considering their objections. Thus, I find that the Writ Appeals preferred against the said orders of the Writ Court, as observed by Dr. Vineet Kothari, J, are wholly unnecessary. Therefore, I am in agreement with the view expressed by Dr. Vineet Kothari, J., as I find that entertaining the writ appeal is not warranted, since the Writ Court has not determined the interest liability of each petitioners against the interest of the Revenue in any manner and on the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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