GST liability and tax invoice obligations: supplier must issue invoice and cannot shift interest burden; refund directed

GST liability and issuance of tax invoices require the supplier to issue a tax invoice within the prescribed period and remain primarily liable to pay GST and interest on delayed payment; failure to issue an invoice attracts a monetary penalty or an amount equivalent to tax evaded, and interest is payable by the person liable for tax for the period of non-payment. A suppliers attempt to transfer the statutory tax or interest burden to the recipient is impermissible, and recovery of improperly collected interest must be refunded to the recipient.

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Issues: Whether the respondent could validly charge and recover interest on delayed payment of GST from the petitioners where the respondent failed to issue the tax invoice within the statutory period and remained responsible for payment of GST.

Analysis: The Court examined the statutory framework under the Central Goods and Services Act, 2017 and the Central Goods and Services Tax Rules, 2017, including the obligation of a supplier to issue a tax invoice within thirty days of supply, the requirement to file returns and pay tax within the prescribed period, the relevance of particulars to be contained in the tax invoice, and the statutory provisions regarding penalty for non-issuance of invoice and interest for delayed payment of tax. Applying these provisions, the Court found that the respondent, as the supplier/lessor, bore the legal responsibility to issue the invoice and to pay GST within the statutory time; failure to issue the invoice and to discharge the tax liability could not be converted into a lawful basis to shift interest liability onto the petitioners.

Conclusion: Held in favour of the petitioners (assessee). The respondent is directed to refund Rs. 3,94,98,383/- recovered towards interest and to pay interest at 18% p.a. if refund is not made within six weeks; respondent may recover the amount from the responsible official.

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