TaxTMI 
TaxTMI 
2024 (1) TMI 1111
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....wned manufacturer of mid-sized motorcycles (250-750CC), vide HS Code 8711 led by the iconic brand Royal Enfield, with its manufacturing unit in Tamil Nadu. They have their Global Head Quarters in Chennai and three manufacturing facilities at Oragadam, Vallam and Tiruvottiyur. The petitioner is operating through their dealers and distributors and by means of more than 1000 large stores and 900 studio stores in major cities and also having more than 800 authorized dealers in India alone. 3.2 The petitioner has paid a sum of Rs. 15,033 Crores as GST for the period from the year 2017-18 till the year 2023. Out of the said amount, a sum of Rs. 10,871 Crores was paid using the Input Tax Credit and a sum of Rs. 4,162 Crores was paid in cash. 3.3 On the date of introduction of GST i.e., 01.07.2017, the petitioner had an accumulated balance of a sum of Rs. 33,87,10,445/- as CENVAT credit ready to be transitioned into the GST regime. However, owing to want of system readiness and technical glitches in the GST Common Portal during the initial stages of implementation of GST, the Department had extended the due dates for filing the Form GST TRAN-1 from time to time and accordingly, the p....
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....recovery proceedings were not withdrawn by the Department and hence, the petitioner challenged the said Recovery notice in W.P.No.16866 of 2023, in which, vide order dated 07.06.2023, this Court had granted stay of recovery proceedings subject to the payment of 30% of the interest amount demanded in the Letter dated 16.05.2023. Aggrieved by the said interim order dated 07.06.2023, the petitioner had preferred an appeal in W.A.No.1263 of 2023 before the Hon'ble Division Bench of this Court. In the said writ appeal, an order came to be passed on 20.06.2023, wherein the Hon'ble Division Bench of this Court had directed the 1st respondent to consider the petitioner's representation dated 29.05.2023 and pass an order within a period of 3 weeks. 3.7 Pursuant to the said order dated 20.06.2023, the Department considered the petitioner's representation and passed an order dated 12.07.2023 confirming the demand of interest against the petitioner. Aggrieved over the said order dated 12.07.2023, the petitioner had filed W.P.No.22013 of 2023. 3.8 The common issue involved in both these writ petitions is as to whether the petitioner is liable to pay interest of the GST amo....
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....der Section 49(1) of the GST Act. Further, he would submit that the Personal Ledger Account under Central Excise Regime is akin to the ECL in GST Regime. 4.4 He would also submit that in the 27th GST Council meeting dated 04.05.2018, the delay in filing the GSTR 3B by tax payers due to technical glitches in the filing of Form TRAN 1 was recognised and as a result, the GST Implementation Committee had approved the waiver of Late Fee on such delayed filing. 4.5 Further, he would contend that in the present case, there is no element of withholding of tax as the petitioner had rightly deposited the amount into ECL on time. Therefore, since there is no basis to levy the demand for interest by the Department and Section 50(1) of GST Act is not attracted in this case. 4.6 It is also brought to the knowledge of this Court by the learned Senior counsel that a query was raised under the Right to Information Act, 2005 (hereinafter called as "RTI Act") on how the GST collection figure is arrived at by the Government and the RTI response, which was issued by the Ministry of Finance Department of Revenue, set outs that GST collection figures are prepared on the basis of the amount depos....
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....aler to upload the TRAN-1 Form and there is no role for the respondent to grant any "transitional credit" under Section 140 of the GST Act read with Rule 117 of the GST Rules, unless the Form TRAN-1 was uploaded by the petitioner in the GST Portal. Once the said Form TRAN-1 is uploaded, the same will be carried forward and the transitional credit will be credited to the ECL of the petitioner. Hence, he would submit that the non-availability of "Transitional Input Tax Credit" has no bearing for filing the mandatory monthly returns in GSTR-3B on the 20th day of the succeeding month. 5.4 Further, he would contend that though the time for filing the TRAN-1 was extended by the Government from time to time, there was no extension to file the monthly returns in Form GSTR-3B. Therefore, since the transitional credit can be availed as and when it is credited to the ECL and as and when Form TRAN-1 was filed by the respondent, the reasons assigned by the petitioner for non-filing of monthly returns is not correct. 5.5 He would also submit that there is no reason for the petitioner to retain the GST collected from their customers to the tune of Rs. 527.54 Crores and detain the same in th....
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....ax reported in MANU/OR/236/2022; (v) Orissa Stvedores Ltd vs. Union of India reported in MANU/OR/1116/2022; (vi) RSB Transmission (India) Ltd. vs. Union of India reported in MANU/JH/1260; (vii) Haji Lal Mohd Biri Works vs. State of Uttar Pradesh reported in (1974) 3 SCC 137; (viii) The Sales Tax Officer vs. Dwarika Prasad Sheo Karan Dass reported in (1977) 1 SCC 22; (ix) Khazan Chand vs. State of Jammu and Kashmir reported in (1984) 2 SCC 456; (x) Prahlad Rai vs. Sales Tax Officer reported in (1991) Supp (2) SCC 612; (xi) Commissioner of Sales Tax vs. Qureshi Crucible reported in (1993) Supp (3) SCC 495; 6. I have given due consideration to the submissions made by Mr.Vijay Narayan, learned Senior counsel appearing for the petitioner and Mr.A.P.Srinivas, learned Senior Standing Counsel appearing for the respondents and also perused the materials available on record. 7. In the present case, on the date of introduction of GST i.e., 01.07.2017, the petitioner had an accumulated balance of a sum of Rs. 33,87,10,445/- as CENVAT credit ready to be transitioned into the GST regime. However, due to the technical glitches a....
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.... of FORM GST TRAN-1 4.10.1. Commissioner (GST Policy Wing), CBIC stated that in the 15 meeting of GIC held on 26 03 2018, it was recommended that the taxpayers, who could not submit FORM GST TRAN-1 due to technical errors, should be allowed to authenticate and file the same by 30.04.2018 and that those taxpayers who were not able to file FORM GSTR-3B due to non-filing of FORM GST IRAN-1, shall be allowed to file the same by 31.05 2018. He informed that the GSTN has sent a proposal to waive late fee on delayed filing of FORM GSTR-3B in such cases. He further stated that to enable such waiver through notification, a class of taxpayers has to be defined for the 17,573 such identified cases, CEO, GSIN replied that the formulation of such definition and the list of 17,573 taxpayers would be prepared by GSTN 4.10.2. Special Secretary, GST Council observed that such waiver/reversal of the late fee may be conditional upon the taxpayers authenticating and filing FORM GST TRAN-1 and associated FORM GSTR-3B by 30.04.2018 and 31.05.2018 respectively. 4.10.3. After discussion, GIC approved the following: i. Waiver of late fee on such delayed filing of FORM GS....
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.... 89.21 28.08.2017 25.08.2017 August 197.06 103.28 93.78 93.78 20.09.2017 20.09.2017 September 206.66 119.53 87.13 87.13 17.10.2017 20.10.2017 October 189.93 105.11 84.82 84.82 20.11.2017 20.11.2017 November 207.49 128.70 78.79 78.79 20.12.2017 20.12.2017 December 217.78 123.98 93.80 93.80 19.01.2018 22.01.2018 TOTAL 1221.73 694.19 527.54 527.54 17. Therefore, except the pending transitional CENVAT credit to the extent of a sum of Rs. 33 crores for the month of July, 2017, all the other amounts have been credited to Electronic Credit Ledger and Electronic Cash Ledger and there was no due as on the date of filing of Form GSTR-3B returns. The following table also shows the actual due date for filing of Form GSTR-3B returns for the respective months and the date on which the Form GSTR-3B returns were filed by the petitioner: Month (2017) Due date for filing Form GSTR 3B Date of filing Form GSTR 3B July 28.08.2017 24.01.2018 August 20.09.2017 31.01.2018 September 20.10.2017 02.02.2018 October 20.1....
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....22. By referring the above judgement, he would submit that in terms of Section 50 of the GST Act, the proceedings has been launched against the petitioner for the belated filing of Form GSTR-3B returns and for the payment of the self-assessed tax, beyond the due date for which the petitioner is liable to pay the interest at a sum of Rs. 23,76,26,657/-. 23. However, Mr.Vijayanarayan, learned Senior counsel, who is appearing for the petitioner would submit that it is not correct to state that the instance of payment of tax would occur only after filing the GSTR3B returns but otherwise when the actual payment of tax made to the Government in terms of the explanation (a) to Section 49(11) of the Act. 24. Under these backgrounds, now let me examine the legal position by referring the various provisions of the Act, Rules made thereunder and case laws of various High Courts and Hon'ble Apex Court. In such view, it would be apposite to extract the provisions of Section 39(1) of the Act, which states as follows: "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 th....
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....th of every month: 30. In the above form, the particulars, which were sought under Section 39(1) of the Act, has to be stated in the column No.6.1, which states about the payment of tax. Further, in the 2nd column of 6.1, the details of tax payable under the Integrated tax, Central tax, State and Union Territory tax and Cess has to be stated and this will be the total tax liability of a Registered person for the relevant month for which the return is filed. Further, the column Nos. 3, 4, 5 and 6 of 6.1 (payment of tax), states about the tax paid through ITC under the different heads, the column No.7 deals with the details of tax paid by way of TDS/TCS and the column No.8 states about the tax/cess paid in cash. 31. Therefore, it is clear that prior to the filing of the Form GSTR- 3B, the tax should have been paid by using GST PMT-06 and that is the reason why the details of the payment of tax is required to be furnished in the said form irrespective of time of filing the GSTR-3B, whether it is before or after the due date for filing the returns. 32. Now let me examine as to what is the last date for payment of tax, by a registered person, to the Government? For this purpose....
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.... 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;" 35. A reading of the above explanation makes it clear that the date of credit to the account of Government in an authorised bank shall be deemed to be the date of deposit in the Electronic Cash Ledger. Therefore, once the Form GST PMT-06 is generated and if any amount is paid through the said form in the authorised bank, the same will be credited to the account of the Government and thereafter only, it will be deemed to be credited to the Electronic Cash Ledger. When the GST is paid by using Form GST PMT-06, it will be credited in the following manner: 1) First the GST amount will be credited to the account of the Government; 2) Secondly, the date, on which it is credited to the Government, is deemed to be the date of deposit in the Electronic Cash Ledger. 36. Thus, it is clear that in terms of Section 39(1) of the Act, while filing the the monthly returns in Form GSTR-3 or GSTR-3B, the registered person/assessee has to state the amount of tax paid, which means before th....
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....r have been maintained and it is not that the tax liability would be discharged only on the date when the GSTR-3B has been filed. But it is ultimate proof/account for discharge of tax liability. The said discharge of tax liability will happen on different date, which is prior to the filing of GSTR-3B monthly return, in terms of provisions of Section 39(1) and 39(7) of the Act, whenever the GST payment is remitted to the account of Government by the registered person. 40. Whenever, the GST has been paid by using Form GST PMT- 06, the tax liability will be discharged to that extent. Thus, the filing of GSTR-3B would ensure the complete discharge of GST liability by the registered person through the accounting entries in the respective ledgers. Hence, it does not mean that only when the GSTR-3B is filed, the Government can utilise the GST collection made by the registered person i.e., it is not that until the filing of monthly returns, the registered person can retain the said amount in the Electronic Cash Ledger or Electronic Credit Ledger forever. From the moment it is deposited by generating GST PMT-06, it is the money of the exchequers, since the money was collected only under ....
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....d other amounts.- (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed. (2) ................... (3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed. (4)................ (5)............... (6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54." 46. Section 49(1) of the Act deals with the amount to be credited to the Electronic Cas....
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....rson 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" 49. A reading of the above provision makes it clear that every person, who is liable to pay the tax in accordance with the provisions of the Act and Rules made thereunder, but fails to pay the tax within a prescribed period, which remains unpaid, shall pay on his own interest at such rate not exceeding 18% per annum. 50. The aforesaid Section deals with the interest, which has to be paid, if the tax is not paid within the prescribed period. If such being the case, what would be the prescribed period? To answer this, we have to analyse the provisions of Section 39(7) of the Act. 51. The provisions of Section 39(7) of the Act states that the tax shall be paid to the Government not later than the last date, on which he required to furnish the monthly returns i....
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....er. The normal function of a proviso is to except the something out of the enactment or to quantify something enacted therein, which but for the proviso would be within the purview of the enactment. 56. With regard to the above aspect, it would apposite to extract the law laid down by the Hon'ble Apex Court with regard to the usage of the proviso as rendered in Romesh Kumar Sharma case, which reads as follows: "The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. As was stated in Mullins v. Treasurer of Survey [1880 (5) QBD 170, (referred to in Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subhash Chandra Yograj Sinha (AIR 1961 SC 1596) and Calcutta Tramways Co. Ltd. v. Corporation of Calcutta (AIR 1965 SC 1728); when one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso. The proper function of a proviso is to except and to deal with a case which would otherwise fall within the general language of the main ....
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....ond the scope of the provision of Section. 58. In the present case, the proviso to Section 50(1) of the Act was interpreted in such way to give a meaning so as to the proviso will override the provision. In the provision of Section 50(1) of the Act, it has been stated that every person is liable to pay tax within the prescribed period. This Court has already given its findings for the words "prescribed period" holding that the date prescribed under Section 39(7) of the Act would be the last date for the payment of tax. Hence, when a specific date is prescribed in the provisions, the proviso cannot alter the said date, since it is contrary to that provision. In the present case, the Hon'ble Division Bench of the Jharkand High Court had interpreted the said proviso in such a way that the proviso will override the provision and whereby altered the date for payment of tax to the Government, which is not permissible and thus, the same is contrary to the provisions of Section 50(1) of the Act. 59. Further, Section 54(12) of the Act deals with the payment of interest at the rate of 6% for the delay in refund of GST. If there is any delay in refund of GST in terms of Section 54(1....
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....ntry in column (3) of the said Table, namely:- S.No Class of Registered persons Due date (1) (2) (3) 1 Registered persons whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep. twenty-second day of the month succeeding such quarter. 2 Registered persons whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi. twenty-fourth day of the month succeeding such quarter. (2) Every registered person required to furnish return, under sub-rule (1) shall, subject to the provisions of section 49, discharge his liability towards tax, interest, penalty, fees or any other amount payable under the Act or the provisions of this Chapter by debiting the electron....
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.... "9. Deposit of Central Excise Duty in the PLA is a statutory requirement. The Central Excise Rules, 1944, specify a distinct procedure for payment of excise duty leviable on manufactured goods. It is a procedure designed to bring in orderly conduct in the matter of levy and collection of excise duty when both manufacture and clearances are a continuous process. Debits against the advance deposit in the PLA have to be made of amounts of excise duty payable on excisable goods cleared during the previous fortnight. The deposit once made is adjusted against the duty payable on removal and the balance is kept in the account for future clearances/removal. No withdrawal from the account is permissible except on an application to be filed before the Commissioner who is required to record reasons for permitting an assessee to withdraw any amount from the PLA. Sub-rules (3), (4), (5) and (6) of Rule 173G indicates a strict and vigorous scrutiny to be exercised by the central excise authorities with regard to manufacture and removal of excisable goods by an assessee. The self removal scheme and payment of duty under the Act and the Rules clearly shows that upon deposit in the PLA the a....
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....of a person, though available with the bank itself, is not taken to be the money available for the benefit of the bank. Money available with the bank is different from money available for the bank till the bank is 14 VRS,J & PKR,J W.P.No.44517/2018 allowed to appropriate it to itself. Similarly, the tax already paid on the inputs of supplies of goods or services, available somewhere in the air, should be tapped and brought in the form of a credit entry into the electronic credit ledger and payment has to be made from out of the same. If no payment is made, the mere availability of the same, there in the cloud, will not tantamount to actual payment. 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." 70. For all the reasons as discussed above, this Court is of the view that the law laid down by the Hon'ble Division Bench of the Jharkand High Court in RSB ....
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....o the concerned Government account maintained in the authorised bank, a Challan Identification Number is generated by the collecting bank, and the same is indicated in the challan as laid down under subrule (6) of rule 87 of the CGST Rules. In the petitioner's case, such CINs have been generated, and such Challan Identification Numbers have been recorded on the challans also, which are HDFC17092400195007 and HDFC17092400195744. These facts have not been disputed by the respondents. Thus, it is evident that the amount in question had actually been deposited by the petitioner on 19.9.2017 for the purpose of payment of tax and was received in the bank designated by the respondents. Moreover, it is an admitted fact that Rs. 114.51 crores (rounded off) paid in the designated bank on 19.9.2017 and also input tax credit of Rs. 14,12,35,762/- debited on 19.9.2017 have been lying to the credit of the GST Department, and the petitioner has not utilised this sum aggregating to Rs. 128.63 crores (rounded off) for discharging any other tax liability. 14. Thus, the petitioner had duly discharged the tax liability of August, 2017 within the period prescribed therefor; however, it was onl....
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....6E dated 12.07.2023 passed by the 1st respondent are liable to be quashed. Accordingly, quashed. 74. In the result, these writ petitions are allowed. No cost. Consequently, the connected miscellaneous petitions are also closed. ============= Document 1 3.1 FORM GSTR-3B [See rule 61(5)] 1. GSTIN 2. Legal name of the registered person Auto Populated Details of Outward Supplies and inward supplies liable to reverse charge Nature of Supplies Total Taxable value 2 (a) Outward taxable supplies (other than zero rated, nil| rated and exempted) (b) Outward taxable supplies (zero rated) (c) Other outward supplies (Nil rated, exempted) (d) Inward supplies (liable to reverse charge) (e) Non-GST outward supplies Year Month Integrated Tax Central State/UT Tax Cess Tax 5 3.1.1. Details of supplies notified under sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 and corresponding provisions in Integrated Goods and Services Tax/Union Territory Goods and Services Tax/State Goods and Services Tax Acts. Description (1) (i) Taxable supplies on which electronic commerce o....