9911796707
TMI Blog2022 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... some force to the submissions of the respondents that credit cannot, prior to availment be taken to construe the payment . There are any number of situations where credit may be found to have been availed erroneously or on a mistaken interpretation of law. Thus, it would be risky, from the view-point of the revenue, to state as a general proposition that the mere availability of electronic credit should be assumed to be utilization that would insulate the petitioner from the levy of interest. Thus, unless an assessee actually files a return and debits the respective registers, the authorities cannot be expected to assume that available credits will be set-off against tax liability. The specific issue raised relates to the levy of interest u/s 50 of the Act in a situation where the petitioner has not filed its returns of turnover for a particular period and the remittance of taxes for the aforesaid periods is admittedly belated. The petitioner argues that no interest need be levied on the strength of the balances lying to its credit in the ECR and ECrR. - The issue decided against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 for production of orders." 3.Consequent upon the direction as aforesaid, the petitioner has appeared before the respondent and advanced submissions, pursuant to which, an order has been passed on 18.01.2021 accepting one portion of the submissions made. The petitioner has sought and has been granted permission to raise additional grounds addressing what remained of the grievance under order dated 10.04.2019, as covered under order dated 18.01.2021 and the respondent has also filed an additional counter. Pleadings are thus complete. 4. What follows in the succeeding paragraphs of this order addresses the contents of order dated 18.01.2021 alone, and the prayer in this writ petition thus stands moulded, to this extent. The levy of interest u/s 50 of the Act, arises from the fact that when the petitioner filed a GSTR 3B return for the month of July, 2017, there was an inadvertent error whereby the data pertaining to its plant at Faridabad was included instead of data pertaining to the Chennai plant. 5. This swap resulted in a short disclosure of liability for the period July to October 2017 leading to the levy of interest. The petitioner had filed a grievance petition seeking m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been inserted by Act No.23 of 2019. The conclusion was that the proviso should operate retrospectively and thus, in a case where an assessee had sufficient cash credit, there is no question of the Department requiring to be compensated, since funds were available with it, to the credit of that assessee. 11. While it is the above reasoning that is found favour with the respondents qua cash credits, a distinction is sought to be made qua cash credits and credits available in the ECR and ECrR. While payments in cash denotes the actual availability of cash to the credit of the assessee concerned/petitioner, deposits standing to the credit of an assessee/petitioner, do not necessarily, and in all circumstances, imply that the resources to back such credit up, are within reach of the Department. This is all the more in a case such as the present where the petitioner has not actually filed the returns and effected a debit to the ECR and EcrR to the extent of the tax payable. Thus, credit cannot be equated with cash remittances. 12. The reasoning in the impugned order is as follows: '4.2.Sufficient Balance in Electronic Credit and Cash ledger: 4.2.1. The GST Registrant stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng discussions, it is evident that unless the GST Registrant files the Returns and a debit entry towards tax liability is made in the Electronic Credit and Cash ledgers, in respect of the tax liability for the relevant tax period, it cannot be considered as tax payment made. In this regard, the observations of the Honorable Telangana High Court, in the Writ Petition No.44517 of 2018 filed M/s.Megha Engineering & Infrastructures Ltd, are relatable to the discussions made above.' 13. The contention of the petitioner has been rejected to this extent, and liability computed as follows: 4.9. Calculation of interest on delayed 'cash payments under the Reverse Charge Mechanism (RCM): 4.9.1. Now, after the above-mentioned amendments in law, interest on delayed payment of GST is chargeable only on net tax liability (cash portion). As per the verification report submitted by the Jurisdictional Deputy Commissioner, Sriperumbudur Division, the GST Registrant is liable to pay amount of Rs.67,84,030/ [under the Reverse Charge Mechanism (RCM), payable in cash, for the month of July 2017], which the GST Registrant had deposited on 19.08.2017 and adjusted the said amount at the time of fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST registrant, the interest on delayed payment of tax (cash under RCM), worked out as per Table B above, payable by the GST registrant, works out to Rs.1,19,02,178/- (Rupees One Crore, Nineteen Lakh, Two Thousand, One Hundred and Seventy Eight). 14. In deciding this issue, what must weigh with the Court is the pointed and specific language of Section 50 of the Act and I have extracted Section 50 of the Act below. I find that the language used is categoric to the effect that it is only when a remittance is effected by way of debit, that an assessee would be protected from the levy of interest. Acceding to the stand of the petitioner would result in rewriting the proviso, to the effect that, even mere availability of credit would insulate the petitioner from interest, which, in my view, is impermissible. 15. The provisions of Section 50 are extracted below: Section 50. Interest on delayed payment of tax; (1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit ledgers. 19. These observations, though rendered in the context of rectification of GSTR-3B, are relied upon by the petitioner to suggest that availability of credit would suffice to exonerate it from both non-filing of return as well as tax liability. The Nagpur Bench of the Bombay High Court, in the case of Mahavir Manakchand Bhansali Vs Commissioner of Income Tax, has held that while the normal rule of interpreting the physical statute is the literal rule of interpretation, when Parliament enacts a law, it proceeds, the Bench states, on the basis that the State will act fairly and not place an unjustified burden upon the subject. This decision has been rendered in the context of the Income Tax Act, 1961, and application of the ratio of this decision will depend on whether or not the impugned action is found to be proper and legally sound. 20. Though a slew of judgments have been cited and relied upon by the petitioner and I have perused the same carefully, Eicher Motors Ltd. And Another Vs. Union of India and Others, [(1999) 2 SCC 361], Commissioner of C.Ex., S.T. & Cus., Cochin Vs. Fact Ltd., [(2017) 355 ELT 55], N.C.Mukherjee and Co. V.s Union of India and Another, [68 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
