TaxTMI 
TaxTMI 
2026 (10) TMI 84
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....of mandamus to declaring the notices demand notice dated 30/8/2023 and attachment notice dated 19/10/2023 levying interest of Rs.4,82,295/- on delayed payment of liability in GSTR-1 for the month of December 2018 as illegal, arbitrary and contrary to law and also contrary to the principles of natural justice and set aside the same, consequently direct the 2nd respondent not to collect the interest on delayed payment of tax and grant such other relief or reliefs as are deemed fit and proper in the circumstances of the case." Factual Matrix 3. The petitioner, M/s. Sri Uma Manpower Suppliers, is a registered person under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the "CGST Act"). For the tax period of December 2018, the petitioner declared its tax liability in its GSTR-1 return. However, the corresponding liability was not debited towards tax within the prescribed period. 4. The petitioner contends that on 05.01.2019, it deposited amounts of Rs.15,60,826/- and Rs.23,88,588/- through two separate challans, which were credited to its Electronic Cash Ledger. The petitioner maintains that an amount of Rs.35,82,368/-, representing the tax liability pe....
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....was therefore contended that the petitioner could not be held liable for interest on account of the subsequent delay in debiting the Electronic Cash Ledger, particularly when such delay was attributable to systemic and technical difficulties and was not occasioned by any wilful default on the part of the petitioner. In support of the said contention, reliance was placed on the judgment of a learned Single Judge of the Madras High Court in M/s. Tamil Nadu State Transport Corporation (Villupuram) Limited v. The Additional Commissioner of Central Tax [W.P.No.9793 of 2024, dated 14.03.2025] wherein the Court considered the liability to pay interest where the tax amount had already been deposited in the Electronic Cash Ledger. iii) That the impugned notices are illegal, arbitrary and contrary to law. It was contended that the respondent failed to duly consider the petitioner's replies dated 01.09.2023 and 20.11.2023 and proceeded to initiate recovery proceedings without properly dealing with the contentions raised therein. Such non-consideration of the petitioner's replies, according to the learned counsel, amounts to a violation of the principles of natural justice. ....
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....it is necessary to examine the statutory scheme governing payment of tax under the CGST Act and the Rules framed thereunder. Section 49(1) of the CGST Act provides for credit of amounts deposited towards tax, interest, penalty, fee or any other amount to the Electronic Cash Ledger. 13. Section 49(3) further provides that the amount available in the Electronic Cash Ledger may be used for making payment towards tax, interest, penalty, fee or any other amount payable under the Act or the Rules. Thus, the statutory scheme contemplates a distinction between the deposit of an amount into the Electronic Cash Ledger and its subsequent utilization towards discharge of a particular tax liability. 14. Rule 87 of the CGST Rules, 2017, which deals with the Electronic Cash Ledger, similarly contemplates crediting the amount deposited into the Electronic Cash Ledger and debiting the said ledger for payment towards tax, interest, penalty, fee or any other amount. Therefore, mere deposit of an amount in the Electronic Cash Ledger, though resulting in a credit in favour of the registered person, does not by itself result in appropriation of that amount towards a particular tax liability. Such ....
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....n which the amount due is deposited in the taxpayer's Electronic Cash Ledger. However, this Court is faced with the contrary view expressed by the Division Bench of the Jharkhand High Court in RSB Transmissions (supra 2), which is more direct and holds that mere deposit in the Electronic Cash Ledger prior to the due date does not amount to discharge of the tax liability. Having regard to the statutory scheme contained in Sections 39, 49 and 50 of the CGST Act, this Court is of the view that the reasoning adopted by the Division Bench of the Jharkhand High Court merits acceptance. 18. Further, the contention of the petitioner that the delay in filing the GSTR-3B return was occasioned by technical glitches in the GST portal cannot absolve the petitioner of the statutory liability to pay interest. Though the petitioner has attributed the delay to technical difficulties, the material placed on record does not establish that such technical difficulties prevented the petitioner from discharging the statutory liability in the manner prescribed under the Act. In any event, the existence of technical difficulties, without anything further, cannot alter the statutory consequence flowi....