2024 (4) TMI 949 - HC - GST

High Court Validates GSTR 3B Return, Directs Tax Authorities to Adjust Penalty and Interest Against Future Liability

Bhole Baba Milk Food Industries Limited Versus Union of India And 2 Others

HC ruled in favor of the petitioner regarding GSTR 3B return for April 2023. Despite payment timing discrepancies between the bank and GSTN, the court ... Penalty for Non-filing of monthly return - Seeking permission to file GSTR 3B Return - Seeking refund of amount illegally debited from the Electronic Cash Ledger towards interest and penalty - HELD THAT:- Whatever be the true facts, this much is clear that the petitioner had initiated the payment of tax for the month of April, 2023 within time, in the manner prescribed. The amount was debited from its account, within prescribed time. To that extent, 'failure' may never be attributed to the petitioner- in timely payment of the tax amount. The levy of late fee (Section 47) and interest (Section 50) under U.P. GST Act, 2017 may arise only in the event of 'failure' on the part of an assessee to file a return and/ or payment of due tax within time. Insofar as the delay may be attributed exclusively to the respondent-bank after such payment was made by the petitioner within time, on that statement itself the levy of penalty remains unwarranted. What errors may have been committed by the bank/ or GSTN may not involve the petitioner. Thus, leaving it open to the GSTN and the Bank to device a better mechanism to ensure prompt credit and debit entries to arise in real time as may not create any doubts or disputes in future, the present writ petition stands disposed of as below. The amount of penalty Rs. 1,07,710.51/- and interest Rs. 100/- deposited by the petitioner under protest may be adjusted against the tax liability for the month of April, 2024 onwards without incurring any liability as to interest on that amount. Petitioner sought mandamus to permit filing of GSTR-3B for April 2023 belatedly and refund of interest of Rs. 107,710.51 and penalty of Rs. 100 debited from its Electronic Cash Ledger. Facts show petitioner generated a corporate e-payment challan on 19.05.2023 and the amount was debited from its bank account within time; the bank approved the payment later and GSTN recorded credit at a later time. Court observed that the petitioner 'had initiated the payment of tax for the month of April, 2023 within time, in the manner prescribed' and that any 'failure' in timely credit arising from the bank or GSTN cannot be attributed to the petitioner. Noting that levy of late fee (Section 47) and interest (Section 50) under the U.P. GST Act, 2017 arises only from such 'failure,' the petition was disposed by directing that the amount of penalty Rs. 1,07,710.51 and interest Rs. 100 deposited under protest be adjusted against tax liability from April 2024 onwards without further interest.