Ineligible Input Tax Credit confirmation upheld where taxpayer admitted liability and did not use statutory reduced payment options.

Assessment confirmed demand for ineligible input tax credit, interest and penalty where taxpayer admitted the liability and paid from the electronic credit ledger before assessment; statutory alternative reduced penalty/payment options existed for timely payment after notice or before assessment but were not availed. Interest was assessed on shortfall in credit ledger for earlier periods and penalty imposed for delayed payment under the applicable penalty provisions. Because the petitioner accepted the liability, effected payment and did not invoke the statutory reduced-payment/penalty options, the assessment order confirming tax, interest and penalty was upheld and the writ dismissed.

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Issues: (i) Whether the impugned assessment order under Section 74 confirming demand of ineligible input tax credit, interest and penalty is liable to be interfered with.

Analysis: The assessment challenged is one where a show cause notice issued under the relevant GST provisions alleged ineligible input tax credit. The petitioner accepted the proposed demand and made payment from the electronic credit ledger prior to the assessment order. Interest was confirmed on the basis of insufficiency of credit ledger balance for specified earlier periods, and penalty was imposed under the relevant penalty provisions for delayed payment. The statutory framework provides alternative reduced penalty/payment options if the taxpayer makes payment within specified time limits after issuance of the notice or prior to assessment; those options were available but not availed by the petitioner. Given the petitioner admitted the tax liability and effected payment, and having not invoked the alternative payment/penalty options prescribed in the statute, there is no basis to interfere with confirmation of tax, interest and penalty in the assessment order.

Conclusion: The impugned assessment order confirming demand of tax, interest and penalty is upheld and the writ petition is dismissed, against the assessee.

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