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Interest and penalty not leviable when there is no fault of Assessee in depositing GST

Bimal jain
Interest and Penalties Not Imposed If GST Paid on Time Without Assessee's Fault, Per Court Ruling The Allahabad High Court ruled that interest and penalties cannot be imposed on an assessee if there is no fault in depositing GST. In the case involving a petitioner, Bhole Baba Milk Food Industries Limited, the court determined that fees and interest are applicable only when the assessee fails to file returns or pay taxes within the prescribed time. The petitioner had initiated tax payments on time, but the Revenue Department received them later. The court directed the adjustment of interest and penalty amounts against the tax liability, thereby disposing of the writ petition. (AI Summary)

The Hon’ble Allahabad High Court in the case of BHOLE BABA MILK FOOD INDUSTRIES LIMITED VERSUS UNION OF INDIA AND 2 OTHERS - 2024 (4) TMI 949 - ALLAHABAD HIGH COURT allowed the writ petition and held that the levy of fee and interest would arise only in case where the failure is on part of the assessee to file return and/or payment of tax due within the prescribed period of time.

Facts:

Bhole Baba Milk Food Industries Limited (“the Petitioner”) has filed the writ petition before the Hon’ble High Court for refund of the amount of interest and penalty for non-filing of return which has been debited from the Electronic Credit Ledger.

Issue:

Whether interest and penalty leviable when there is no fault of Assessee in depositing GST?

Held:

The Hon’ble Allahabad High Court in the case of BHOLE BABA MILK FOOD INDUSTRIES LIMITED VERSUS UNION OF INDIA AND 2 OTHERS - 2024 (4) TMI 949 - ALLAHABAD HIGH COURT held as under:

  • Noted that, the Petitioner has initiated the payment of tax within the prescribed time period in the manner prescribed for which the amount is debited from the bank account. However, the Revenue Department (“the Respondent”) states that the amount has been received at later stage.
  • Opined that, the levy of fee and interest would arise only in case where the failure is on part of the assessee to file return and/or payment of tax due within the prescribed period of time.
  • Held that, the writ petition is disposed of directing the Respondent to adjust the amount of interest and penalty against the tax liability

(Author can be reached at [email protected])

Goods and Services Tax - GST
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