TaxTMI 
TaxTMI 
2026 (2) TMI 1257
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....facturing transmission line equipment such as aluminium conductors, cables and wire rods, and is registered under the Goods and Services Tax regime. 3. Upon introduction of the Goods and Services Tax with effect from 01.07.2017, the petitioner became entitled to carry forward eligible CENVAT credit under Section 140(1) of the Central Goods and Services Tax Act, 2017. Accordingly, the petitioner filed Form TRAN-1 on 10.07.2017 claiming a transitional credit amounting to Rs. 1,31,07,632/-. It is the case of the petitioner that due to technical glitches in the GST portal during the initial phase of implementation, the said transitional credit did not reflect in its Electronic Credit Ledger (ECL). Apprehending loss of substantial credit, the petitioner reflected the said amount as Input Tax Credit in its GSTR-3B return for the month of July 2017. 4. Subsequently, the petitioner realised that they had taken wrong excess credit of transitional credit amounting to Rs. 3,48,523.00 and the petitioner was entitled to claim only Rs. 1,28,21,441/-, accordingly, the petitioner rectified the mistake and reversed by submmiting Trans form on 26.12.2017. The petitioner asserts that the credit....
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....ectronic credit ledger, and no part of the said reversal was made by debiting the electronic cash ledger. Therefore, it is submitted that in the absence of utilisation of input tax credit, the question of levy of interest does not arise. 8. Further, learned counsel for the petitioner also contends that by virtue of the amendment to Section 50(3) of the CGST Act, 2017 brought into force retrospectively with effect from 01.07.2017, interest is leviable only when input tax credit is wrongly availed and utilised. The legislative intent, as clarified through subsequent amendment, makes it abundantly clear that mere availment without utilisation does not attract interest liability. Since in the present case, the credit was never utilised and stood reversed, the essential condition for the levy of interest is absent. The learned counsel submits that the authorities have failed to appreciate the retrospective nature of the amendment and have proceeded on an erroneous interpretation of the unamended provision. 9. Learned counsel further submits that the impugned action of adjusting the petitioner's legitimate refund of Rs.32,00,000/- towards alleged interest liability without proper a....
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....ondent submits that the petitioner seeks to avoid a statutory consequence arising from its own wrongful conduct. The action of the Respondents is strictly in accordance with the law and safeguards public revenue. It is therefore respectfully prayed that the writ petition be dismissed. Appreciation & Conclusion. 13. In para 5.4 of this Writ Petition, the petitioner has admitted that it has wrongly received excess credit of transitional credit amount Rs. 3,48,523/-. The petitioner was only entitled to claim Rs. 1,28,21,441/-, thereafter, the petitioner tried to reverse the amount of TRANS- 1 twice, but failed to do so. In September 2018, the GSTR-3 B return was submitted in order to reverse the amount of TRANS-1, but the same was not reflected in the GST portal. The petitioner finally reversed the Input Tax Credit of Rs. 1,31,07,632/- in monthly return April GSTR- 3B, therefore, the petitioner wrongly availed the excess credit of Rs. 1,31,07,632/- from electronic credit ledger from 28.08.2017 to 20.05.2019 i.e. total 630 days, therefore, a show cause notice was issued to pay the interest @ of 24% per annum under Section 42(10) and Section 50(3) of the GST Act, 2017 amounting to....
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....tant case, the appellant had claimed the credit under dispute on 28.08.2017. 10. Further, the appellant's contention that the interest on delayed payment of tax to be calculated on net tax payable is not applicable to the instant case as the instant case pertains to the excess claim of ITC in their electronic credit ledger and not related to the payment of tax per se. 11. Now, I would take up the issue whether interest can be recovered without issuance of SCN or otherwise. In this respect, section 79(12) of the CGST Act, 2017 reads as: "(12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79." Further, section 79 of the CGST Act, 2017 reads as: "(1) Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of th....
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.... ................................................................................... (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) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Actin such manner and subject to such conditions and within such time as may be prescribed." Thus, in view of the above, it is clear that liability towards output tax only would be discharged through the electronic credit ledger. Whereas, any liability towards tax, interest, penalty or any other amount would be discharged from the electronic cash ledger. Thus, the liability towards interest can only be discharged from the electronic cash ledger and therefore the said Submission made by the authorized representative on behalf of the appellant does not merit consideration." 15. Learned counsel for the....