2025 (11) TMI 238 - HC - GST

Matter remanded for fresh adjudication; interest recalculated on late tax under Section 39 (GSTR-3B), petitioner to file ITC certificates

HC remanded the matter for fresh adjudication. Although the entire tax was paid pre-SCN, interest must be recalculated on the belated tax payment by ... Liability of interest - outward supplies captured GSTR-09 - entire tax amount was paid by the petitioner, prior to issuance of SCN - HELD THAT:- The matter is remanded back - the interest has to be calculated on the belated payment of tax, after comparing the delay with reference to the payment of tax in the monthly returns to be filed under Section 39 of the respective GST enactments in GSTR-3B and thereafter, interest has to be computed by taking note of the debit entry on 19.12.2022. The petitioner shall file necessary certificates to justify that the petitioner is entitled to the balance amount of input tax credit. The petitioner shall file the same within a period of thirty (30) days from the date of receipt of a copy of this order. The respondent shall thereafter proceed to pass final orders on merits after hearing the writ petitioner. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether confirmation of part of the tax demand in the impugned order is liable to be disturbed insofar as the tax component (defect No.1) was paid from the petitioner's electronic credit ledger prior to issuance of the show cause notice, and whether interest remains payable. 2. Whether the adjudicating authority properly confirmed the reduced demand in respect of input tax credit shortfall (defect No.3) without affording the petitioner an opportunity to place supplier certificates and other supporting documents, and whether remand for fresh consideration is appropriate. 3. Whether the remedy lies in writ jurisdiction or by way of statutory appeal before the Appellate Authority under the relevant GST enactments (Section 107), given existence of disputed questions of fact. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Payment from electronic credit ledger and liability to interest (defect No.1) Legal framework: The Court construes obligations under the GST regime concerning payment of tax via electronic credit ledger, filing of monthly returns under Section 39 (GSTR-3B), and the levy of interest on belated payment; late fee under Section 47 is addressed separately for defect No.4. Precedent treatment: No earlier decisions were invoked or considered by the Court in the text; the Court proceeds on statutory interpretation and record facts. Interpretation and reasoning: The Court finds that payment of the tax amount from the electronic credit ledger on 19.12.2022 is a relevant fact but does not by itself eliminate the question of interest. Interest must be calculated by reference to the period of delay measured against the due dates for payment as per monthly returns filed under Section 39 (GSTR-3B). The proper methodology requires comparing the tax payment date with the return/payment due dates and computing interest accordingly; the debit entry on 19.12.2022 must be taken into account in the calculation. Ratio vs. Obiter: Ratio - where tax is paid from electronic credit ledger before issuance of a show cause notice, the fact of payment does not automatically negate interest; interest is to be computed by reference to delay vis-à-vis monthly return/payment obligations and by taking the specific debit entries into account. Obiter - none beyond directions on computation particulars. Conclusions: The matter relating to defect No.1 is remitted to the respondent for recalculation of interest. The respondent is directed to compute interest on the belated payment after comparing the relevant delay against monthly returns under Section 39 and to note the debit entry of 19.12.2022 in tabulating interest (with the Court exemplifying the tabulation of days and interest in the order). Issue 2 - Entitlement to input tax credit and opportunity to produce supplier certificates (defect No.3) Legal framework: The Court relies on the principle that claims to input tax credit must be supported by relevant documents (supplier certificates etc.) and that adjudication must afford a reasonable opportunity to the affected party to place supporting material before passing the final order. Precedent treatment: No precedents were cited; the Court applied procedural fairness principles inherent in statutory adjudication under GST provisions. Interpretation and reasoning: The Court notes that the petitioner has obtained certificates from suppliers asserting entitlement to additional input tax credit. Given that the adjudicating authority confirmed a specific amount (Rs.48,835 for CGST and Rs.48,835 for SGST) against the proposal in the show cause notice, it is necessary to permit the petitioner to produce the supplier certificates and other supporting evidence. The presence of disputed questions of fact requires that the authority hear the petitioner afresh on the documentary evidence before finalizing liability. Ratio vs. Obiter: Ratio - where confirmation of input tax credit shortfall occurs, the adjudicating authority must afford the assessee an opportunity to produce supplier certificates and other supporting documents and reassess on merits; failure to do so warrants remand. Obiter - none additional. Conclusions: The Court directs the petitioner to file necessary supplier certificates within thirty (30) days from receipt of the order; the respondent is directed to hear the petitioner and pass final orders on merits thereafter. The question of entitlement to the balance input tax credit is remitted for fresh adjudication. Issue 3 - Appropriate forum for challenge: writ jurisdiction versus statutory appeal Legal framework: The statutory scheme provides a remedy by appeal to the Appellate Authority under Section 107 of the GST enactments; ordinarily disputed questions of fact are to be canvassed before the appellate/tribunal forum. Precedent treatment: No direct precedent was cited; the Court records the respondent's contention that statutory appeal is the proper remedy because of disputed factual issues. Interpretation and reasoning: The Court balances the respondent's submission about disputed questions of fact and the petitioner's entitlement to have certain issues reconsidered. Rather than dismissing the writ on the ground of alternative remedy, the Court exercises judicial discretion to remit specific aspects (defect Nos.1 and 3) to the adjudicating authority for recalculation and fresh consideration, thereby preserving the petitioner's right to statutory remedies thereafter if aggrieved. Ratio vs. Obiter: Ratio - where disputed factual questions exist and statutory appeal is available, the Court may nevertheless remit contested issues to the adjudicating authority for fresh consideration if procedural fairness or incorrect computation requires corrective remand; the availability of a statutory appeal does not preclude limited judicial interference by way of remand. Obiter - the Court's direction does not preclude the petitioner from pursuing statutory appeal remedies subsequently. Conclusions: The writ petition is disposed by remitting specified issues to the respondent for recalculation and reconsideration; the respondent's argument about statutory appeal is noted but does not preclude the remand directed by the Court. Concluding Directions and Remedies The Court orders: (a) remand to respondent to redo exercise on defect Nos.1 and 3; (b) interest on defect No.1 to be recomputed against monthly return/payment due dates under Section 39, taking into account the debit entry dated 19.12.2022; (c) petitioner to file supplier certificates for defect No.3 within thirty days; (d) respondent to pass final orders on merits after hearing; (e) matter disposed with no costs. These directions constitute the operative ratio for relief granted by remand and procedural opportunity.