TaxTMI 
TaxTMI 
2023 (9) TMI 1179
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....bitrary, illegal and violation of the fundamental rights of the petitioner. 2. The brief facts leading to filing of present writ petition are as under: 3. The petitioner is a Public Limited Company and is engaged in manufacture and supply of Cement under the brand name of Birla Shakti Cement. The petitioner was regular in payment of GST, however, owing to financial crisis, there was a delay in payment of GST. The Respondent No.3 issued letter dated 19.06.2023 to the petitioner demanding payment of interest of Rs.1,28,97,355/- on account of delayed payment of tax from July, 2017 to January, 2023 along with calculation indicating month wise interest payable on delay in filing of GSTR 3B return. The petitioner was informed to reconcile the interest and pay the same within 07 days of receipt of letter to avoid recovery under section 79 of the CGST Act, 2017. 3. That due to financial crisis, there was a delay in payment of tax dues, however, the petitioner paid the dues along with interest @18% for the delayed period in accordance with section 50 of the GST Act basing on its own calculations. That in response to notice dated 19.06.2023 of the Department, the petitioner submitte....
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....in law and the same were issued without conducting requisite proceedings under section 73 of the CGST Act, 2017 and further, both the garnishee proceedings in Form DRC-13 were not issued to the petitioner. 8. He further submitted that the garnishee proceedings are against provisions of Section 79(1)(c) of CGST Act, 2017 read with Rule 145(1) of CGST Rules, 2017 and also Section 50(1) of the CGST Act, 2017. That no late fees is prescribed under section 47(2) of the CGST Act, 2017 and therefore, the garnishee proceedings for demand of Late Fees Under Section 47(2) of the CGST Act, 2017 is perverse, arbitrary, void abinitio and liable to be set-aside. He further submitted that Section 79 of the CGST Act,2017 pertains to Recovery of Tax and is applicable only in cases wherein, any amount is payable by an assessee to the Government under any of the provisions of this Act or the rules made there under and the same is not paid. 9. He further submitted that as per Rule 145 of CGST Rules, 2017, the proper officer may serve upon a person referred to in clause(c) of sub-section (1) of section 79, a notice in FORM GST DRC-13 directing him to deposit the amount specified in the notice. Th....
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.... or to whom the refund has erroneously been made, or who has wrongly availed or utilised 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 there under. Sec. 79. Recovery of tax"- (1) Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made there under is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely:-- (a) & (b) xxxx (c) (i) the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amo....
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.... Section 47(2) of GST Act in respect of late fee, which is impermissible under law. 18. Per contra, learned Standing Counsel for respondent Nos.1 to 4 submitted that petitioner's amounts are still lying in their account and were not transferred/credited to government. He further submitted that tax due amounts can be paid only through cash ledger and cannot be paid through credit ledger. Therefore, even if amounts are lying in the credit ledger account, the same does not amount to payment or transfer to the Department. Therefore, the contention of the petitioner that the amounts are lying with the Government is factually incorrect. 19. Learned Standing Counsel further submitted that the contention of the petitioner that the rules were not framed is factually incorrect, since rules were already framed from date of implementation of GST Act, 2017. He further submits that the petitioner paid the tax with delay, thereby invited interest for the delayed period which is 18% per annum. As per the records of respondent authorities, the petitioner was due a sum of Rs.1,28,97,355/- and despite notice, the petitioner failed to pay tax as well as interest on delayed payments. Therefore, t....
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....procedure as provided under CGST Act, 2017 in issuing garnishee proceedings to the bankers of the petitioner and there is no illegality or arbitrariness in the action of the respondent authorities. Consideration : 24. From the material and submissions made by learned counsel for the petitioner and standing counsel for respondent-department, it is clear that admittedly there is a delay on the part of petitioner in payment of GST dues. It is also not in dispute that, the petitioner paid the GST dues belatedly, however along with interest as per it's own calculation. It is noteworthy to mention that the petitioner had addressed letter dated 28.06.2023 to the respondent authorities requesting three months time for payment of interest owing to financial crisis and acute shortage of working capital. The petitioner addressed another letter dated 25.07.2023 disputing the interest liability arrived at by the respondents and further requested the authority to demand interest from due date of filing of GSTR 3B Return till the date of deposit of GST to Electronic Cash Ledger till the issue is decided by Hon'ble High Court. 25. A perusal of Sections 73, 74 and 79 of CGST Act and Rules,....
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....g of debiting the Electronic Cash Ledger without filing of GSTR 3B Return. 30. Hon'ble Supreme Court in the case of Pratibha Processors v. Union of India 1996(88) E.L.T.12 (S.C) observed as under;- "In fiscal Statutes, the import of the words -- "tax", "interest", "penalty", etc. are well known, they are different concepts. Tax is the amount payable as a result of the charging provision. lt is a compulsory exaction of money by a public authority for public purposes, the payment of which is enforced by law. Penalty is ordinarily levied on an assessee for some contumacious conduct or for a deliberate violation of the provisions of the particular statute. Interest is compensatory in character and is imposed on an assessee who has withheld of any tax as and when it is due and payable. The levy of interest is geared to actual amount of tax withheld and the extent of the delay in paying the tax on the due date. Essentially, it is compensatory and different from penalty-- which is penal in character." 31. In the present case, admittedly, the respondent authorities have not issued any notice in terms of Section 79(1) of CGST Act, 2017 to the assessee to submit his reply/expl....