TaxTMI 
TaxTMI 
2022 (11) TMI 483
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.... later, and whether interest could be levied on delayed filing of GSTR-3B in such circumstances under Section 50 of the Act? 2. In the case of the present petitioner, interest of Rs. 13,23,783/- has been levied due to delay in filing of GSTR-3B returns for the period July 2017 to December 2019, in terms of Section 50 of the CGST Act at the applicable rate, vide impugned letter dated 22nd July 2021 (Annexure-2 to the writ petition). The tabular chart containing the details of period of tax and the date of filing of GSTR 3B returns and computation of interest for such delay as contained in the letter dated 22nd July 2021 is extracted hereunder as the particulars relating thereto are not in dispute, except that the petitioner denies liability to pay interest on the delay in filing of GSTR 3B for the relevant periods on the ground that the amount of tax has already been deposited prior to filing of the GSTR.3B return in its Electronic Cash Ledger: "It has been observed from GSTIN portal that you have delayed filing of GSTR 3B returns for some months during the period July 2017 to December 2019, details of which is as under: 1. GSTR 3B delay filing interest calculation fo....
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....e Gujarat High Court by judgment dated 14th November 2019 on facts as in the case of the present petitioner, neither were any technical glitches in filing GSTR 3B return for the concerned periods in GSTIN Portal, nor had it intimated to the jurisdictional officer and GSTIN help desk in timely manner. He also reiterated that the deposits made by challans mentioned in petitioners reply is reflected in their Electronic Cash Ledger and stays in that cash ledger till GSTR 3B return is filed. Only then the cash ledger is debited and that amount is deposited in Government account as tax. The Electronic Cash Ledger is an account of the taxpayer maintained by the GSTIN system reflecting the cash deposits in recognized banks and payments of taxes and other dues made by the taxpayer. It contains a summary of all the deposits and payments made by a taxpayer. Merely depositing an amount in Electronic Cash Ledger does not make it a tax deposit / payment to a Government account. The letter dated 13th August 2021, has also been impugned by the petitioner. 4. The petitioner has also sought a declaration that interest under Section 50 (1) of the CGST Act 2017 can only be levied when the Governmen....
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....urn. According to him, the natural inference of the same could be that payment of tax can be made prior to the due date of filing of such return. He has further referred to Explanation to Section 49 as well as Rule 87 (6) and 87 (7) and submitted that when an amount is deposited towards tax in the Government bank account and is reflected as credited in the Electronic Cash Ledger, upon filing of GSTR 3B return, such amount is merely shown as being debited from the Electronic Cash Ledger and there is no real movement or transfer of money from the petitioner's end as the amount is already in the Government exchequer. 7. He refers to Section 50 (1) of the Act which provides for levy of interest on that part of tax which has been paid beyond the period prescribed. According to him, since the period prescribed for payment of tax is the last date for filing of GSTR 3B return under Section 39(7), interest can only be levied on that part of tax which has been deposited later than the due / last date for filing of GSTR 3B return. Relying upon the proviso to Section 50 (1), it is contended that since the Electronic Cash Ledger is debited only at the time of filing of GSTR 3B return, levy o....
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....Grasim Industries Ltd. Versus Collector of Customs, Bombay [(2002) 4 SCC 297 para 10] on the proposition that no words or phrase in a statute should be interpreted so as to render it redundant or superfluous. It is submitted that the elementary principle of interpreting any word while considering the statute is to gather the intention of the Legislature. Learned counsel for the petitioner has referred to the definition of 'Ledger' in the Black's Law Dictionary (sixth Edition page 891) and submitted that ledger is only a book of accounts which records business transactions one for the debit entries and other for the credit. Beyond the literal interpretation of ledger, the expression used in the statute i.e. Electronic Cash Ledger cannot on its own be meant to create a liability to pay interest when the amount of tax already stood deposited in the Electronic Cash Ledger prior to the filing of the GSTR-3B returns. Learned counsel for the petitioner lastly submits that since the amount has been realized under a mistake of law, it ought to be refunded to the petitioner. Learned counsel for the petitioner further submits that under the composition scheme regarding which QRNP scheme h....
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....ectronic Cash Ledger of the registered taxpayer only after offsetting at the time of filing return only, the amounts gets debited from Electronic Cash Ledger of the taxpayer to Government coffers. The writ petitioner has filed the GSTR-3B returns delayed for the months of July 2017, October 2017, November 2017 and March 2018 by 05 days, 25 days, 01 day and 01 day respectively and thus, the cash amount of the Electronic Cash Ledger of the petitioner got debited after such delay and thus, interest under Section 50 became automatic on net cash tax liability. Learned counsel for the Respondent has further submitted that Section 50 of the CGST Act, 2017 deals with levy of interest on delayed remittance of the output GST liability as prescribed under Section 39(1) read with Section 39(7) of the CGST Act, 2017. The Proviso to Section 50 makes it clear that the interest shall be calculated only on the net GST liability i.e. only that portion which was paid through Cash Ledger and it was made applicable only prospectively effective from 01.09.2020 vide Notification No. 63/2020 dated 25.08.2020. The CBIC vide Administrative Instruction dated 18.09.2020 further reiterated that the amendment b....
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....od, would be rendered otiose. Counter affidavit of the Respondents was silent on this issue as well. Therefore, the proviso that was enacted to overcome an anomaly cannot be used to justify a similar anomaly. 10. Considering the legal issues involved in the instant writ petition, the Respondent No. 2-Commissioner of Central Goods and Services Tax and Central Excise, Jamshedpur was asked to assist the court vide order dated 08.09.2022. The Commissioner, State Tax also was asked to appear along with him as the issue concerns both the Central and State Tax authorities. Both the Officers appeared before this Court on 15.09.2022 and made their presentation and submissions. Commissioner of CGST and State Tax have also submitted a compilation containing certain facts concerning the petitioner. The same were brought on record by way of an affidavit. 11. In order to appreciate the issue in controversy involved in the writ petition, it would be proper to refer to the relevant provisions of the CGST Act hereunder. Section 39 which relates to furnishing of returns is quoted hereunder. Chapter IX 39. Furnishing of returns "(1) Every registered person, other than an Input Se....
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....such return not later than the last date on which he is required to furnish such return. (8) Every registered person who is required to furnish a return under sub-section (1) or sub-section (2) shall furnish a return for every tax period whether or not any supplies of goods or services or both have been made during such tax period. (9) Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act: Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following [the end of the financial year, to which such details pertain]....
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.... be prescribed. (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of-- (a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order; (b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax; (c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax [Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;]72; (d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax: [Provided that the input tax credit on account of Uni....
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....med to be the date of deposit in the electronic cash ledger; (b) the expression,- (i) ―tax dues means the tax payable under this Act and does not include interest, fee and penalty; and (ii) ―other dues means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder." `"50. 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. Provided that the interest on tax payable in respect of suppliers made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall....
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....uthorised banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft: Provided that the restriction for deposit up to ten thousand rupees per challan in case of an Over the Counter payment shall not apply to deposit to be made by - (a) Government Departments or any other deposit to be made by persons as may be notified by the Commissioner in this behalf; (b) Proper officer or any other officer authorised to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties; (c) Proper officer or any other officer authorised for the amounts collected by way of cash, cheque or demand draft during any investigation or enforcement activity or any ad hoc deposit: [Provided further that a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also make the deposit under sub-rule (2) through international money transfer through Society fo....
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.... either fully or partly, the amount debited under sub-rule (10), to the extent of rejection, shall be credited to the electronic cash ledger by the proper officer by an order made in FORM GST PMT-03. (12) A registered person shall, upon noticing any discrepancy in his electronic cash ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04. Explanation 1.-The refund shall be deemed to be rejected if the appeal is finally rejected. Explanation 2.- For the purposes of this rule, it is hereby clarified that a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he shall not file an appeal. [(13) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess in FORM GST PMT-09.]" 12. Section 39(7) provides that every registered person who is required to furnish a return under sub-section (1) ....
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....t to such conditions as may be prescribed. As per sub-section (4), the amount available in the Electronic Credit Ledger may be used for making any payment towards output tax under this Act or IGST Act in the manner prescribed and subject to the conditions. Explanation to sub-section (11) of Section 49 also makes it clear that the date of credit to the amount of Government in the authorized Bank shall be deemed to be the date of deposit in the Electronic Cash Ledger. The deposit in the Electronic Cash Ledger, therefore, does not amount to payment of the tax liability. If the scheme of the Act and the relevant provisions of Section 39(7) is read in conjunction with the manner of payment of tax prescribed under Section 49, it is clear that any registered person can pay the tax not later than the last date on which he is required to furnish such return. But on filing of GSTR-3B only, the amount lying in his Electronic Cash Ledger is debited towards payment of tax, interest or tax liability. Under the scheme of the Act, no person can make payment of tax prior to filing of GSTR 3B return, though such deposits may be made or are lying in his Electronic Cash Ledger. Tax liability gets disc....
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....f filing of GSTR-3B return would be against the scheme of GST Act and would make the working of GST regime unworkable. It can also be understood in a different way. There is no time prescribed for deposit of cash in the Cash Ledger. It, in fact, is just an e-wallet where cash can be deposited at any time by creating the requisite Challans. Since, the amount lies deposited in the Electronic Cash Ledger, a registered assesse can claim its refund any time, following the procedure prescribed under the Act and the Rules. Of course, while making refund from the Electronic Cash Ledger, the proper officer has to satisfy whether any outstanding tax liability remains to be discharged by the person concerned. The computation of interest liability is dependent upon the delay in filing of returns beyond the due date. The tax payer can claim refund under Section 54 of CGST Act at any point of time in accordance with the provisions of the Act. There is a distinction, so far as ITC available in the Electronic Credit Ledger and Electronic Cash Ledger is concerned. As such cash is just in the nature of deposit in the Electronic Cash Ledger, whereas the ITC is available in favour of the assessee on a....