TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 666
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....rest u/s 50 of the said Act without initiation and completion of the adjudication proceedings under the Act? 2. The facts of the present writ application lie in a very narrow compass. The petitioner, being a partnership firm, was registered under the provisions of the CGST Act. Under Section 39 of the CGST Act, provisions have been incorporated for furnishing of monthly return by a registered person on or before 20th day of the month succeeding such calendar month in which returns were to be filed. Said returns are known as 'GSTR-3 Return'. However, it is an admitted fact that due to the Nationwide problem in GSTN Portal, said GSTR-3 Return, which is an auto populated return on the basis of details of inward and outward supply, is not being generated, due to which, by way of stop-gap arrangement, provisions have been incorporated for filing GSTR-3B Return in terms of Rule 61(5) read with Rule 61(6) of the Central Goods and Services Tax Rules, 2017 (for short 'CGST Rules'). 3. Further, under Section 39(7) of the CGST Act, it is provided, inter alia, that a registered person, who is required to furnish his return under sub- section (1) of Section 39, would be liable....
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....f interest has been determined without initiating any adjudication process under Sections 73 or 74 of the CGST Act. It is the specific case of the petitioner that the petitioner is not liable to pay interest as there has been no delay on its part in furnishing of GSTR-3B Return and, consequentially, there is no delay on its part in depositing the tax with the respondent- Authority, as in GSTN Portal, due date for furnishing of return for the months of February and March, 2018 was shown as 31st March, 2019. 7. It has been further argued by Mr. Gadodia that if the amount of interest is not admitted by an assesse, the same requires determination through an adjudication process to be initiated as per the detailed provisions contained under Section 73 of the CGST Act. 8. It has been further submitted by the learned counsel for the petitioner that not only that respondent-Authorities, without initiating adjudication process, have straightaway demanded interest from the petitioner, but they have, in a most arbitrary and illegal manner, by adopting extra legal steps, initiated garnishee proceedings under Section 79 of the CGST Act for recovery of the amount of interest. It has been conte....
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.... date as reflected in GSTN Portal as "31 st March, 2019" for furnishing of GSTR-3B monthly return for the months of February and March, 2018 was reflecting owning to the fact that Central Government, through Central Board of Indirect Taxes and Customs, vide Notification No. 76/2018-Central Tax dated 31st December, 2018 (Annexure -3 series) has waived the levy of late fee for furnishing returns for the months of July, 2017 to September, 2018, if the said returns were furnished between the period 22nd December, 2018 to 31st March, 2019, and the said Notification cannot be interpreted to mean that the last date of filing of GSTR-3B Return has been extended up to 31st March, 2019. Learned counsel for the revenue, in support of his contention that liability for payment of interest is automatic and does not require any adjudication process, has relied upon the following two decisions, namely;-- (1) 2004 (5) SCC 472 (U.P. Cooperative Cane Unions Federations -Vs- West U.P. Sugar Mills Association & ors.) (2) 2010 (2) SCC 672 (Commissioner of Central Excise -Vs- International Auto Limited) 11. Mr. Ratnesh Kumar, learned counsel for the revenue further, while justifying the acti....
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....o pay interest or not, which, in the opinion of the Court, is required to be adjudicated first by the Revenue Authorities. However, the aforesaid facts are noted by us in our Judgment for the limited purpose to indicate that there was a dispute between the Assessee-Petitioner and the Revenue regarding liability of interest for alleged delayed filing of monthly return for the months of February and March, 2018 and, consequentially, alleged delay in payment of tax. 15. In the backdrop of the aforesaid fact, we proceed to decide the main issues involved for adjudication in the instant writ application, which have already been delineated hereinabove. For the purpose of adjudicating the said issues, it would be relevant to quote some of the provisions of the CGST Act, which are as under:- Section -39 "39. Furnishing of returns (1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form, manner and within such time as may be prescribed, a return, electronically, of inward and outward....
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....cer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized for any reason, other than the reason of fraud or any willful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub- section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for such periods other than those covered under sub-section (1), on the person chargeab....
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....thirty days from the due date of payment of such tax." (Emphasis Supplied) 16. A bare reading of the provisions of Section 39(1) read with Section 39(7) of the CGST Act would reveal that a dealer is liable to pay tax within 20th day of the succeeding month for which the dealer was liable to file his monthly return. 17. Further, Section 50 of the Act contains provisions relating to Levy of Interest on delayed payment of tax. A reading of sub-section (2) of Section 50 itself would reveal that interest payable under sub-section (1) of Section 50 is required to be calculated in such manner, as may be prescribed. 18. However, the important issue for consideration in the instant writ application is the interpretation of the provisions of Section 73 of the Act. A bare reading of Section 73(1) of the Act reveals that where it appears to the Proper Officer that any tax has not been paid or short paid" the Proper Officer shall serve notice on the person chargeable with tax, "which has not been so paid" or "which has been short paid" requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under Section 50 of the Act....
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....f Section 73. A bare reading of the aforesaid sub-sections (5), (6) and (7) of Section 73 would reveal that a person chargeable with tax, if before service of notice pays the amount of tax along with interest payable thereon under Section 50 of the Act on the basis of his own ascertainment, then the Assessing Officer, if satisfied that correct tax along with interest has been paid by the said assesse, shall not issue any notice under Section 73(1) of the Act. However, Section 73(7) of the Act provides that if an assesse, who has itself on his own ascertainment, deposited the tax along with interest, but if in the opinion of the Proper Officer, the amount paid on own ascertainment falls short of the amount actually payable, then a notice would be issued by the said Proper Officer under Section 73 (1) of the Act for recovery of the actual amount payable. Thus, from a conjoint reading of the aforesaid provisions, it would be evident that even in a case where an assesse files his return as per his own ascertainment, pays the tax and even pays interest, but if the said amount paid by the assesse is falling short of the amount actually payable, the Proper Officer is required to initiate ....
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.... undoubtedly an automatic liability fastened on the assesse to pay on his own for the period for which tax or any part thereof remains unpaid. 28. Sub-section (2) of Section 50 contemplates that the interest under Sub-section (1) shall be calculated in such manner as prescribed from the day succeeding the day on which such tax was due to be paid. Sub-section (3) of Section 50 further contemplates that a taxable person who makes an undue or excess claim of input tax credit under Section 42(10) or undue or excess reduction in output tax liability under Section 43 (10) shall have to pay interest on undue or excess claim or such undue or excess reduction, at the rate not exceeding 24 percent. 29. A careful perusal of sub Sections (2) and (3) of Section 50 thus would show that though the liability to pay interest under Section 50 is an automatic liability, still the quantification of such liability, certainly, cannot be by way of an unilateral action, more particularly, when the assesse disputes with regard to the period for which the tax alleged to have not been paid or quantum of tax allegedly remains unpaid. Likewise, whether an undue or excess claim of input tax credit or redu....
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....tioner in each case should pay the admitted liability of interest. 33. A careful perusal of the direction issued by the Writ Court does not indicate anywhere as to how the Revenue is prejudiced by the said order, especially when the Revenue is given liberty to pass an order in a manner known to law and communicate the same to the petitioners, after considering their objections. Thus, I find that the Writ Appeals preferred against the said orders of the Writ Court, as observed by Dr. Vineet Kothari, J, are wholly unnecessary. Therefore, I am in agreement with the view expressed by Dr. Vineet Kothari, J., as I find that entertaining the writ appeal is not warranted, since the Writ Court has not determined the interest liability of each petitioners against the interest of the Revenue in any manner and on the other hand, it only remitted the matter back to the concerned Officer to determine the quantum of such liability. Thus, the second question with regard to the maintainability of the writ appeals is answered accordingly." 22. The next issue for adjudication in the instant writ application is as to whether garnishee proceedings under Section 79 of the CGST Act can be initiated ....