Late fee and interest not leviable where tax was paid on time but credit was delayed by banking or GSTN process.

Late fee and interest under the Uttar Pradesh Goods and Services Tax Act, 2017 were not leviable where the taxpayer initiated payment within time and the amount was debited from its account within the prescribed period, because any delay in crediting the tax pool was attributable to the bank or GSTN process rather than the taxpayer. In that situation, penalty was unwarranted. The amount deposited under protest was also permitted to be adjusted against future tax liability for subsequent months.

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Issues: Whether late fee and interest were leviable under the Uttar Pradesh Goods and Services Tax Act, 2017 when the petitioner had initiated tax payment within time but credit to the tax pool was delayed due to the bank or GSTN process, and whether the amount debited under protest could be adjusted against future tax liability.

Analysis: The petitioner had initiated payment of the tax for April 2023 within the prescribed time and the amount stood debited from its account within time. On those facts, failure could not be attributed to the petitioner for purposes of levy of late fee and interest. The delay, if any, was attributable to the bank or GSTN after the petitioner had taken timely steps to pay the tax. In those circumstances, levy of penalty was unwarranted. The amount deposited under protest was also directed to be adjusted against future tax liability.

Conclusion: Late fee and interest were held to be not leviable on the petitioner for the delayed credit situation, and the amount deposited under protest was permitted to be adjusted against tax liability for subsequent months.

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