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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether interest was leviable under Section 50(3) of the Tamil Nadu Goods and Services Tax Act, 2017 read with Rule 88B(3) of the Tamil Nadu Goods and Services Tax Rules, 2017 on input tax credit that was held to have been wrongly availed and utilised on account of a discrepancy between GSTR-3B and GSTR-2A, and whether the writ court should interfere with the assessment order.
Analysis: Section 50(1) deals generally with delayed payment of tax, whereas Section 50(3) specifically governs cases where input tax credit is wrongly availed and utilised. The expression "wrongfully availed and utilised" is not confined to fraudulent or bad-faith cases; any availment and utilisation of credit when the assessee was not eligible to such credit falls within that expression. Rule 88B(3) prescribes the method for computing interest from the date of utilisation until reversal or payment. The assessing authority had applied this specific provision after finding that the credit had already been utilised against other dues before the date of actual set-off of the tax liability.
Conclusion: The levy of interest under Section 50(3) was upheld and no ground for interference under Article 226 of the Constitution of India was made out.
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