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TMI Blog2024 (10) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability inclusive of interest payable by the petitioner for the tax period April, 2018 to March, 2019, the relevant penalty which may be applied in the case of the petitioner was also included in the said Form GST DRC-01A. 4. Upon receipt of such notice, the petitioner had by a response in writing which is appearing at page 37 of the writ petition admitted that by reasons of a clerical mistake in filing GSTR-09 the petitioner had availed excess Input Tax Credit (ITC). Since, according to the petitioner, the ITC was not utilized, by filing a Form GSTDRC-03 on 20th March, 2021 the petitioner had reversed such entry by debiting its electronic credit ledger. 5. Notwithstanding the aforesaid a show cause notice was issued under Section 73 read with Section 50(1) of the said Act on 23rd March, 2021, identifying therein the interest and the penalty leviable on the petitioner in respect of the tax period April, 2018 to March, 2019. The aforesaid ultimately culminated in the order dated 8th April, 2021 passed under Section 73 of the said Act whereby the petitioner was saddled with interest and penalty as appearing in the said order. Being aggrieved, the petitioner had preferred an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in (2014) 163 taxmann.com 414 (Calcutta) and two other judgments; one delivered by the Hon'ble Madras High Court in the case of Grundfos Pumps India Pvt. Ltd. v. Joint Commissioner of GST & Central Excise reported in (2023) 150 taxmann.com 176 (Madras) and the other judgment delivered by the Hon'ble Punjab & Haryana High Court in the case of Deepak Sales Corporation., v. Union of India reported in (2023) 156 taxmann.com 325 (Punjab & Haryana). 11. Independent of the above, it is submitted that although, Section 50 of the said Act provided for liability to pay tax and interest in accordance thereof, an exception has been curved out, which, inter alia, provides the interest on tax payable in respect of supplies made during the tax period and declared in the return for such period furnished after due date in accordance with the provisions of Section 39 of the said Act, except where such return is furnished after commencement of proceedings under Section 73 or Section 74 in respect of the said period, shall be payable on the portion of the tax which is paid by debiting the electronic cash ledger. In other words, in all cases in which proceeding has not commenced, only ITC shall be rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to be placed. In the facts as stated hereinabove, there is no irregularity in the order passed either by the adjudicating authority or by the appellate authority. 14. Heard the learned advocates appearing for the respective parties and considered the materials on record. The short point that falls for consideration in the instant writ petition is whether the petitioner can be called upon to make payment of interest upon the petitioner not complying with the notice issued in Form DRC- 01A as regards payment of interest, prior to issuance of the show cause under Section 73 of the said Act. Admittedly, in this case on the issuance of a notice in Form DRC -01A the petitioner had debited its credit ledger by indicating that by reasons of error committed during filling of GSTR - 09 the petitioner had wrongly availed the ITC. It is the petitioner's case that the ITC, though wrongfully availed, was not utilized by him. According to the petitioner unless, the ITC is wrongfully availed and utilized, in terms of Section 50(3) of the said Act interest is not leviable. I find that the said section had been amended by Finance Act of 2022 with retrospective effect from 1st July 2017. Havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Section 49, read with Rule 86 and 87 of the said Rules, it would be apparent that payment of interest and penalty can only be made by debiting the electronic cash ledger and not from the electronic credit ledger. The payment made on 20th March 2021 in form GST DRC-03 is by debit of the electronic credit ledger. The said debit was made prior to issuance of notice in form DRC-01, as such, there is no irregularity in that regard. Further Section 50(3) specifically provides that only in cases where ITC has been wrongly availed and utilized that the registered taxpayer shall pay interest on such ITC, wrongly availed and utilized. In other words, unless the ITC is both availed and utilized, interest cannot be levied on the registered tax payer. 18. Having regard to the aforesaid, it would be apparent that the proper officer had acted with material irregularity in saddling the petitioner with interest. 19. The only other point raised by Mr. Chakraborty is with regard to the petitioners' advocate's representation in course of hearing with regard to his intent to make payment of the interest. At the first blush, I was prompted to consider the matter from an angle that the adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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