TaxTMI 
TaxTMI 
2020 (2) TMI 668
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....y the writ petitioner. In effect, it is a bank attachment proceedings. 3. The first respondent in W.A.No.2151 of 2019, as the writ petitioner filed W.P.No.15624 of 2019, challenging similar notice issued under Section 79(1)(c) of the said Act to M/s. Indian Overseas Bank, Sriperumbudur, calling upon the said bank to pay a sum of Rs. 10091755/- to the Government under CGST and SGST Act heads dividing equally, from the account maintained by the petitioner herein. Here again, in effect, the impugned proceedings is bank attachment. 4. The case of the writ petitioner in W.P.No.15978 of 2019 is as follows: After the introduction of GST from July 2017, three types of returns are liable to be filed, GSTR-1 showing the details of outward supplies of goods or services by the assessee (details of purchases), GSTR-2 showing the details of inward supplies of goods or services (details of sales) and GSTR-3 stating the total purchases and total sales and the tax payable and the input tax credit permissible and also GSTR-3B, a monthly return through which the assessee has to remit the tax calculated after deducting the input tax credit available. While discharging the monthly dues, the av....
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.... Rs. 85,27,87,219/-, the petitioner has ITC credit of Rs. 623,772,546/- and only Rs. 229,014,673/- is to be discharged in cash. As they had sufficient ITC credit every month (73%), they had adjusted the same against the total GST payable and worked out the interest on the balance cash component. As per their working, the interest liability works out to Rs. 22,9,413/-. However, the impugned bank attachment was issued for realisation of a sum of Rs. 10091755/-. 6. Both the writ petitioners are engaged in the business of manufacturing their respective products. It is not in dispute in both cases there was some delay in filing the return and paying the GST within the time. Therefore, the Revenue, by relying upon Section 50 of the said Act, resorted to recover interest on the delayed payment. Such recovery proceedings culminated into the impugned bank attachments. According to the writ petitioners, the impugned bank attachment proceedings were issued in violation of the principles of natural justice and without passing any order determining the liability to pay interest. 7. It is seen that the Revenue contested the writ petitions by claiming that payment of interest under Section ....
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....ST Act. This writ is disposed of with the above directions. No costs. Consequently, the connected miscellaneous petitions are closed." 9. Likewise, W.P.No.15978 of 2019 was also disposed on 13.06.2019, by following the order made in W.P.No.15624 of 2019, as follows: "5.Following the order made in W.P.No.15624 of 2019, this writ petition is disposed of with the following directions: a) Writ petitioner has produced a computer generated statement for his bank account i.e, Account No.076102000001034, Customer ID 656931 with Indian Overseas Bank, Maraimalainagar (0761), 34, Nandanar Street, Maraimalainagar, Chengalpattu, Tamil Nadu ? 603 209, Email Id: [email protected], IFSC Code: IOBA0000761 to show that the balance available in the writ petitioner's account as of 12.06.2019 is Rs. 33,77,394/- (Rupees Thirty Three Lakhs Seventy Seven Thousand Three Hundred and Ninety Four only). b) As the bank has not been arrayed as respondent, Registry shall communicate this order to the aforesaid bank at the aforesaid address and from and out of the aforesaid balance of little over Rs. 33,00,000/-, the said bank shall pay out an admitted sum of Rs. 9,15,121/-....
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.... Telengana High Court has observed that the liability to pay interest under Section 50(1) of the said Act arises automatically, when a person, who is liable to pay interest fails to pay the tax to the Government within the period prescribed. This finding of the Telengana High Court was relied on before the Writ Court to contend that imposition of interest under Section 50 of the Act is automatic. However, the Writ Court without going into such question disposed the writ petitions by setting aside the bank attachment proceedings subject to a condition that the petitioner in each case to pay the admitted liability. The Writ Court further directed that on making such payment, the Revenue shall consider all the points raised in the reply submitted by each petitioner and to pass an order in a manner known to law and communicate the same to each writ petitioner. It is also made clear in the said order that if the decision taken by the second respondent therein is in favour of the writ petitioner, it is the end of the matter and on the other hand, if it goes against the writ petitioner, they should avail alternative remedy of preferring a statutory appeal to the appellate authority under ....
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....e of Rs. 41,74,620/- and Rs. 1,70,71,048.31 respectively whereas the Assessee in his objections has raised certain issues about the Output GST liability for each month and that the Input Tax Credit available to the Assessee as per Electronic Credit Ledger which has to be adjusted and only on the net Tax payable by cash, the interest liability under Section 50 of the Act on the delay in filing the Returns has to be recalculated to the extent of Rs. 9,15,121/- and therefore, against the Garnishee proceedings initiated by the Assessing Authority directing the Respondent-Bank on the basis of impugned notice dated 2.5.2019 and the Bank was not even arrayed as Respondent in the present Writ Petition, was bad in law. 3. The learned Single Judge passed the following direction in the order impugned before us:- "5.Following the order made in W.P.No.15624 of 2019, this writ petition is disposed of with the following directions: a) Writ petitioner has produced a computer generated statement for his bank account i.e, Account No.076102000001034, Customer ID 656931 with Indian Overseas Bank, Maraimalainagar (0761), 34, Nandanar Street, Maraimalainagar, Chengalpattu, Tam....
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.... has been given by the learned Single Judge to consider the objections of the Assessee dated 10.5.2019 and 29.3.2019 and pass orders in accordance with law, once the admitted interest liability is paid by the Bank, the Assessing Authority, without deciding the objections of the Assessee and re-computing the interest liability, has unnecessarily filed the present intracourt Appeals. The Assessing Authority was bound to decide the aforesaid objections of the Assessee, to determine the correct liability of interest to be paid by the Assessee and without doing so, the garnishee proceedings could not have been initiated. 5. Therefore, the learned Single Judge has rightly set aside the garnishee direction to the Bank, while directing the Bank to deposit the admitted liability for interest under Section 50 of the Act to the extent of Rs. 9,15,121/- (in W.A.No.2127/2019) and Rs. 22,39,413/- (in W.A.No.2151/2019) which the Assessee undertook to pay. 6. I do not find any merit in the present Writ Appeals filed by Revenue and the same are liable to be dismissed. Accordingly, they are dismissed. The connected Miscellaneous Petitions are also dismissed." Per: C.V.KARTHIKEYA....
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.... time, the interest for the delay in filing the Returns automatically arises and there cannot be any explanation for the same. In this regard, with due respect to the view expressed by my learned Brother, I differ from the view taken. My view is fortified by the Division Bench Judgment of the High Court of Telangana in W.P.No.44517 of 2018 dated 18.4.2019 (Megha Engineering & Infrastructures Ltd. v. The Commissioner of Central Tax and others) wherein under very similar facts, it had been held as follows:- "39. Admittedly, the petitioner filed returns belatedly, for whatever reasons. As a consequence, the payment of the tax liability, partly in cash and partly in the form of claim for ITC was made beyond the period prescribed. Therefore, the liability to pay interest under Section 50(1) arose automatically. The petitioner cannot, therefore, escape from this liability." 5. I therefore, hold that the appellant has raised an arguable point which requires deeper consideration of the scope of Section 50 of the Central Goods and Services Tax Act, 2017 and consequently, I am of the view that the summary dismissal of the Writ Appeal at the admission stage itself by my lear....
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....arthikeyan,J. is concerned, I am unable to see any view taken or expressed by Dr.Vineet Kothari,J. on the question as to whether interest under Section 50 of the said Act is an automatic liability or the same is to be determined after considering the explanation offered by the assessee. On the other hand, I find from paragraph 4 of Dr.Vineet Kothari,J's order that the Hon'ble Judge has only observed that the Assessing Authority without deciding the objections of the assessee and recomputing the interest liability, has unnecessarily filed the present intra-court appeals and that the Assessing Authority was bound to decide the aforesaid objections of the assessee to determine the correct liability of the interest to be paid by the assessee and that without doing so, the garnishee proceedings could not have been initiated. Therefore, it is seen that Dr.Vineet Kothari,J. has not expressed any opinion or view on the larger question as to whether the interest on delayed filing of returns arises automatically or not. The Hon'ble Judge has only observed that the Assessing Officer is bound to determine the correct liability of interest after considering the objections raised by ....
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.... Interest on delayed payment of tax: "(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent, as may be notified by the Government on the recommendations of the Council. (2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid. (3) A taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent, as may be notified by the Government on the recommendations of the Council." 27. A careful perusal of the above said provision would show that every person who is liabl....
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.... liability to pay interest arises under section 50 of the said Act, it does not mean that fixing the quantum of such liability can be unilateral, especially, when the assessee disputes the quantum as well as the period of liability. Therefore, in my considered view, though the liability of interest under section 50 is automatic, quantification of such liability shall have to be made by doing the arithmetic exercise, after considering the objections of the assessee. Thus, I answer the first issue accordingly. 30. Next issue to be answered herein is as to whether the dismissal of the writ appeals by Dr.Vineet Kothari,J. is correct or whether those writ appeals ought to have been entertained for further hearing. 31. It is to be noted at this juncture that in both the writ petitions, the respective writ petitioners are not disputing their liability to pay the interest on the delayed payment of tax. On the other hand, they are disputing the quantum of interest claimed by the Revenue by contending that the interest liability was worked out on the entire tax liability instead of restricting the liability to the extent of tax unpaid. It is further seen that the writ petitioners have ....