TaxTMI 
TaxTMI 
2020 (11) TMI 1138
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....'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice; iii) To award Costs of and incidental to this application be paid by the Respondents. 2. Heard the learned Senior Counsel for the petitioner and learned Counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior Counsel appearing for the petitioner invited my attention to the notice at Annexure 'M' dated 17.02.2020, issued by the respondents to the petitioner, calling upon the petitioner to pay interest in a sum of Rs. 1,33,21,214/- towards delayed payment of tax, as enumerated in the table mentioned in the notice for the periods July 2017, August 2017, September 2017, and February 2018. It was submitted that in response to the said notice, the petitioner submitted a reply dated 11.03.2020, giving the details and breakup as to how the payment of the tax was made by way of cash on or before the due date i.e., 20th of the succeeding/following month, and that the remaining portion was available in the Electronic Credit Ledger ....
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.... 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 supplies 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 [or section 74A] in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.] (2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid. (3) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent. as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed. 8. Under identical circumstances, ....
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....orm GSTR 3B for the month of July, 2017. Since the returns for July, 2017 was filed by the petitioner, the GST portal permitted them to file the returns for the subsequent months as well. Accordingly, the petitioner filed all the Returns from the month July, 2017 to December, 2017 on 24-1-2018. * * * * * 44. In the present case, as stated above, the GST amount has been paid by generating GST PMT-06 before the due date without any delay. If any amount is deposited after due date, for the said amount alone, the payment of interest would arise in terms of provisions of section 50(1) of the Act. 45. Now let me examine section 49(1)(3) & (6) of the Act and thus, it would be apposite to extract the same, which reads as follows: "49. Payment of tax, interest, penalty and 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 ....
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....t available under one head can be utilized against the other head in terms of the provisions of section 49(3) of the Act. 48. Section 49(6) of the Act states that the balance amount in electronic cash ledger or electronic credit ledger after the payment of tax/interest/penalty/fee or any other amount, payable under the Act and Rules made thereunder, will be refunded in accordance with section 54 of the Act. The excess amount will be refunded, since the claim for refund would be made while filing the GSTR-3 and the column No. 14 deals with the refund claim made by a registered person. Therefore, in this background, let me examine the provisions of section 50(1) of the Act, which reads as follows: "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"....
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.... of actual payment of tax, whereas, section 50(1) of the Act states that cash should have been paid to the Government within the prescribed period, which is 20th day of every month in terms of section 39(7) of the Act. The said prescribed period is the only time limit provided under section 50(1) of the Act. However, the said proviso was also interpreted otherwise as discussed above vide the judgement rendered in RSB Transmission case by the Hon'ble Division Bench of the Jharkand High Court, which is not permissible since the same is beyond the scope of the provision of section 50(1) of the Act. 55. Normally, a proviso does not travel beyond the provision, to which it is a proviso. It carves out an exception and to the main provision, to which it has been enacted as a proviso to no other. 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 S....
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....ether and effect is to be given to the intention of the parties as disclosed by the deed as a whole" (per Lord Wrenbury in Forbes v. Git [1922] 1 A.C. 256). A statutory proviso "is something engrafted on a preceding enactment" (R. v. Taunton, St James, 9 B. & C. 836). "The ordinary and proper function of a proviso coming after a general enactment is to limit that general enactment in certain instances" (per Lord Esher in Re Barker, 25 Q.B.D. 285). A proviso to a section cannot be used to import into the enacting part something which is not there, but where the enacting part is susceptible to several possible meanings it may be controlled by the proviso (See Jennings v. Kelly [1940] A.C. 206)." 57. In view of the above, it is clear that at any cost, the proviso cannot be beyond 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 ....
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....egistered person other than a person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) or an Input Service Distributor or a non-resident taxable person or a person paying tax under section 10 or section 51 or, as the case may be, under section 52 shall furnish a return in FORM GSTR-3B, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner, as specified under - (i) sub-section (1) of section 39, for each month, or part thereof, on or before the twentieth day of the month succeeding such month: (ii) proviso to sub-section (1) of section 39, for each quarter, or part thereof, for the class of registered persons mentioned in column (2) of the Table given below, on or before the date mentioned in the corresponding entry 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 a....
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....mmon portal shall make available a receipt to this effect." 66. The aforesaid rule 87(7) and (8) deals with the credit to Electronic Cash Ledger. Immediately on receipt of challan identification number from the collecting bank, the said amount shall be credited to the Electronic Cash Ledger of the person, on whose behalf the deposit has been made, which means, as stated in Explanation (a) to section 49(11) of the Act, initially the amount is credited to the Government and thereafter, it will deemed to be credited to the Electronic Cash Ledger, which is an automatic process, i.e., once GSTR-3B is filed, automatically, it will appear in the electronic cash ledger, which is only for the accounting purpose and nothing more than that. 67. In a judgement Modipon Ltd. (referred supra), the Hon'ble Apex Court had taken a similar view and held as follows: "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....
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....nputs charged on any supply of goods and/services, is always available. But, it is available in the air or cloud. Just as information is available in the server and it gets displayed on the screens of our computers only after connectivity is established, the tax already paid on the inputs, is available in the cloud. Such tax becomes an in-put tax credit only when a claim is made in the returns filed as self-assessed. It is only after a claim is made in the return that the same gets credited in the electronic credit ledger. It is only after a credit is entered in the electronic credit ledger that payment could be made, even though the payment is only by way of paper entries. 38. If we take a common example of banking transactions, this can be illustrated much better. An amount available in the account 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....
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.... balance in the electronic cash ledger of the petitioner. In response to such submission made on behalf of the respondents, the learned advocate for the petitioner invited the attention of the court to the averments made in paragraphs 5.4 and 5.5 of the petition, wherein it has been stated that when any payment is made by an assessee by internet banking, a number for the challan for making payment is generated, which is known as Challan Portal Identification Number (CPIN). For two challans dated 19-9-2017, through which the petitioner has paid a total sum of Rs. 114.51 crores (rounded off), such CPINs have been generated on the common portal, and such numbers appear on the challans with other details. CPIN for payment of taxes by the petitioner are 17092400195007 and 17092400195744. On successful credit of the amount to 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 sub-rule (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 c....
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....8 initially as the portal was not supporting the Digital signature of the petitioner's Managing Director. This was brought to the knowledge of the Commercial Tax Officer Villupuram by the petitioner every month through their letters and through a ticket raised in the GST portal. But there was no solutions forthcoming from the department. Despite the technical issues, the petitioner discharged their output tax without adjusting any nput tax credit by depositing their exact tax liability in their Electronic Cash ledger. 3. Further, he would submit that the petitioner experienced the same technical issues even from April 2018 till July 2019 s their Managing Director got retired and the new incumbent's digital signature could not be supported by the GST portal During this period also, even in the absence of uploading their GSTR 3B monthly returns, the petitioner discharged their exact tax liability by depositing in the Electronic Cash ledger. However, it is the case of the respondent that the petitioner had only deposited the money into the electronic cash ledger and they have not filed their GSTR 3B returns in time and debited cash ledger for payment of tax which they....
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....as held that the interest liability stops accruing from the date on which the amount due is deposited in the tax payer's electronic cash ledger. 8. In this context, it would be apposite to extract Rule 88 B(1) of the C.G. & S.T. Rules, 2017 and the same is extracted hereunder: 'Provided that where any amount has been credited in the Electronic Cash Ledger as per provisions of sub-section (1) of section 49 or before due date of filing the said return, but is debited from the said ledger for the payment of tax while filing the said return after the due date, the said amount shall not be taken into consideration while calculating such interest if the said amount is lying in the said ledger from the due date till the date of its debit at the time of filing return." 9. The aforesaid provision is clarificatory in nature and therefore the question of retrospective or prospective effect will not come into picture and therefore the question of payment of interest will not arise. 10. As far as other payments or penalty is concerned, if there is any non-payment on or before the due date, it is left open to the respondent to take appropriate action. ....
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.... (a) the date of credit to the account of the Government in the authorised bank shall be deemed 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." 12. As per the above explanation, the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in electronic cash ledger. Therefore, when the return is filed by the assessee in Form GSTR3B and if there is sufficient balance available in the electronic cash ledger, than liability as per the return is simply offset against such balance by debit in electronic cash ledger. Hence, the tax paid at the time of deposit into electronic cash ledger which is adjusted against liability at the time of filing of return is merely setting off of the amount from electronic cash ledger to be utilised for payment of tax liability as per the return filed. Therefore, the amount in the electronic cash ledger is ....
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....No. 63/2020 dated 25.08.2020 and thereafter, in the 39th meeting of the GST Counsel, it was decided to apply the proviso with effect from 01.07.2017 by Finance Act, 2021. The retrospective of the provisio was notified by notification No. 16 of 2021 dated 01.06.2021. 14. Therefore, the purpose of introduction of the proviso to Section 50 was only to clarify with regard to levibility of the interest on net tax liability and not on gross tax liability of the assessee. The proviso has therefore nothing to do with the period for which the interest is to be levied. 15. Therefore, the interest can be levied only from the due date of payment of tax till the deposit of such tax in the electronic cash ledger on demand of interest even for subsequent period from the date of deposit in electronic cash ledger till date of filing of return is therefore not tenable. 16. Rule 88B which has come into effect from 1st July, 2017 as per notification No. 14 of 2022 dated 5th July, 2022 is in context of amendment to Section 50(3) of the CGST Act as per decision taken by the GST counsel in his 47th meeting in relation to the transfer of the balance of CGST/IGST in electronic ca....
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.... a statute. Nothing is gained by extensive references to luminous classics or supportive case law. Having explained the approach we make to the specific 'proviso' situation in s. 2(a) of the Act, what strikes us as meaningful here is that the legislature by the amending Act classified what was implicit earlier and expressly carved out what otherwise might be mistakenly covered by the main definition. The proviso does not. in this case, expand, by implication, the protected area of building tenancies to embrace 'business' leases. 18. We may mention fairness to counsel that the following, among other decisions, were cited at the bar bearing on the uses of provisos in statutes: Commissioner of Income-tax v. Indo Mercantile Bank Ltd.(1); M/s. Ram Narain Sons Ltd. v. Asst. Commissioner of Sales Tax(2); Thompson v. Dibdin (8); Rex v. Dibdin (4) and Tahsildar Singh v. State of U.P.(5). The law is trite. A proviso must be limited to the subject matter of the enacting clause. It is a settled rule of construction that a proviso must prima facie be read and considered in relation to the principal matter to which it is a proviso. It is not a separate or independent ena....
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....e head business were sustained in an Indian State or in the latter case in any other Indian State or British India, these losses could not by virtue of the proviso be deducted from profits made in British India or Travancore State as the case may be. They could only be adjusted against profits arising in an Indian State or in the case of Travancore State in British India or another Indian State. Thus the proviso, it was contended, was a modification of the method of computation under s. 10(2) of the Indian Act for determining profits and gains of the business of any resident. We should be averse to lend any countenance to such a mode of construing a proviso unless the language used expressly or by necessary intendment leads to that conclusion. The proper function of a proviso is that it qualifies the generality of the main enactment, by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment. Ordinarily it is foreign to the proper function of a proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment. "It is a ....
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....nduct 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 amount of such deposit stands credited to the Revenue with the assessee having no domain over the amount(s) deposited. 10. In C.I.T. vs. Pandavapura Sahakara Sakkare Karkhane Ltd. 7 and C.I.T. vs. Nizam Sugar Factory Ltd. 8 cited at the Bar, ....
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....uring the interregnum period (the date when the tax became due and the date on which the tax is paid). The assessee enjoys that amount during the said period. It is in this sense that the interest is compensatory in nature and in order to recover the lost revenue, the levy of interest is contemplated by Section 120 of the Finance Act, 2000 retrospectively." 21. The Hon'ble Supreme Court in case of Mahalaxmi Sugar Mills Co. versus C.I.T. Delhi has held as under: "10. It is apparent that section 3(2) requires the payment of cess on the date prescribed under the rules. Rule 4 of the U.P. Sugarcane Cess Rules, 1956 provides that the cess due on the sugarcane entering into the premises during the first fortnight of each calendar year must be deposited in the Government treasury by the twenty second day of that month and the cess due for the remainder of the month must be deposited before the seventh day of the next following month. If the cess is not paid by the specified date, then by virtue of s.3(3) the arrear of cess will carry interest at the rate of six per cent per annum from the specified date to the date of payment. Section 3(5) is a very different provisi....
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....erest provided for under s.3(3) is in the nature of compensation paid to the Government for delay in the payment of cess. It is not by way of penalty. The provision for penalty as a civil liability has been made under s.3(5) and for penalty as a criminal offence under s.4. The Delhi High Court proceeded entirely on the basis that the interest bore the character of a penalty. It was, according to the learned Judges "penal interest". The learned Judges failed to notice s.3(5) and s.4 and the other provisions of the Cess Act." 22. From the above decision, if applied to the facts of the present case, when the assessee petitioner deposited the amount which is credited into electronic cash ledger after actual deposit in the Government Treasury, there is no loss to the Government Revenue merely because such deposit gets adjusted against the actual liability at the later date at the time of filing of return. The Hon'ble Madras High Court in case of Eicher Motors Limited versus The Superintendent of GST & Central Excise (HC) Madras has taken into consideration the entire scheme of the GST Act and thereafter arrived at a conclusion that no interest is leviable under Section 50 o....
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.... 3) As long as the GST, which was collected by a registered person, is credited to the account of the Government not later than the last date for filing the monthly returns, to that extent, the tax liability of such registered person will be discharged from the date when the amount was credited to the account of the Government. If there is any default in payment of GST, even subsequent to the due date for filing the monthly returns i.e., on or before 20th of every succeeding month, for the said delayed period alone a registered person is liable to pay interest in terms of Section 50(1) of the Act." 23. The Hon'ble Supreme Court in case of Maruti Wire Industries Pvt. Ltd. versus S.T.O IST Circle Mattancherry and Others [2001-VIL-11-SC] has held that there can be no interest liability if no return is filed at all by the assessee and the tax liability would crystalize only upon filing of return. Therefore, if the contention raised by the respondent is accepted, then there cannot be any liability to pay the tax before the same is adjusted against the liability at the time of filing return and therefore, such liability can be said to have arisen only at the time of fili....
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....of deposit in the account of the electronic cash ledger till the date of filing of the return. 25. In view of the above foregoing reasons, the impugned communication through email dated 26.04.2022 and the letter dated 27.12.2021 in Special Civil Application No. 8871 of 2022 as well as impugned notice dated 10.08.2022 in Special Civil Application No. 17657 of 2022 are hereby quashed and set aside. In the result, these petitions are allowed. Rule is made absolute. No order as to cost." 11. So also, the Gujarat High Court in the case of Symphony Limited & Anr. Vs. Union of India & Anr. [2025 - VIL - 1037 - GUJ] has held as under: "8. Learned Senior Advocate Mr. Kamal Trivedi with learned advocates Mr. Anuj Trivedi and Mr. Vinay Bairagra for the petitioners submitted that by the impugned communications in both the petitions, the petitioner Company is asked to pay the amount of interest considering the date of filing of Form GSTR - 3B without considering the actual date of payment by the petitioner Company from the electronic cash ledger. 8.1 It was submitted that by the impugned letters the respondents have called upon the petitioner Company to make the pa....
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....GST amounting to Rs. 3,61,27,024/- from their electronic cash ledger on 25.08.2017 by debiting the same on 25.08.2017 to the government exchequer. However, the petitioner credited Rs. 3,61,27,024/- in their electronic cash ledger on 19.09.2017 and after a lapse of about 1 year Rs. 3,61,27,024/- was debited from electronic cash ledger on 14.08.2018. Hence, Ra. 3,61,27,024/- was deposited into the government exchequer on 14.08.2018 by debiting Rs. 3,61,27,024/- from electronic cash ledger. 8.7.2. In short, the petitioner was required to deposit Rs. 3,61,27,024/- on 25.08.2017 but they deposited Rs. 3,61,27,024/- in government exchequer on 14.08.2018 and hence petitioner is liable to remit interest for delayed payment (i.e. from 26.08.2017 to 13.08.2018) under Section 50 of the CGST Act, 2017. The petitioner by crediting Rs. 3,61,27,024/- in electronic cash ledger (not in government exchequer) on 19.09.2017 has assumed that they have deposited Rs. 3,61,27,024/-in government in exchequer. In this case, the petitioner contradicted himself by depositing Rs. 3,61,27,024/- government exchequer by debiting from electronic cash ledger on 14.08.2018. Here, the provisions of Section 4....
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..... Electronic Cash Ledger.- (1) The electronic cash ledger under sub-section (1) of section 49 shall be maintained in FORM GST PMT-05 for each person, liable to pay tax, interest, penalty, late fee or any other amount, on the common portal for crediting the amount deposited and debiting the payment therefrom towards tax, interest, penalty, fee or any other amount. Further, to remove any confusion among the traders, CBIC in FAQs at question no. 10 has clarified that "Can the amount available in cash ledger be deemed as payment for any liability? Answer: No, unless the taxpayer makes a debit entry from a cash ledger for a specific liability, the amount lying in the cash ledger cannot be assigned to any liability." On minute perusal of the provisions of Section 49, Section 50 of CGST Act, 2017 and Rule 87 of CGST Rules, 2017 & clarification issued by the CBIC, it is apparent that deposit to electronic cash ledger cannot be considered as deposit into government exchequer until and unless the amount deposited into the electronic cash ledger is debited from the ledger. On going through the electronic cash ledger and electronic credit ledger (An....
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....turn filed. Therefore, the amount in the electronic cash ledger is nothing but in nature of advance tax lying in the account of the assessee which cannot be withdrawn or utilised in any manner by the assessee except for payment of tax liability as per the return filed. 13. Section 50 of CGST Act provides for interest on delayed payment of tax. Proviso to Section 50(1) refers to interest on tax payable in respect of supplies made during a tax period and declaring the return for the said period furnished after the due date in accordance with the provisions of Section 39 shall be payable on the portion of the tax which is paid by debit in electric cash ledger. It appears that the respondents have literally interpreted the words "interest shall be payable on that portion of the tax which is paid by debit in the electronic cash ledger". The debit in electronic cash ledger is on the date of filing of the return and therefore, interest is calculated till date of filing of return ignoring the fact that the assessee might have deposited the amount in electronic cash ledger prior to the date of filing of return and return may be filed belatedly for various reasons. Debiting of elect....
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....tion to the transfer of the balance of CGST/IGST in electronic cash ledger of registered person to electronic cash ledger of CGST/IGST of the distinct person. Section 50(3) of the CGST Act was also amended clarifying that where ITC has been wrongly utilised, the registered person shall be paid interest only on such input cash credit which is wrongly availed and utilisedand in that context, Rule 88B was introduced with effect from 01.07.2017 for calculation of interest on delayed payment of tax for wrongly availed and utilised input tax credit on the portion of wrongly utilised input tax credit. The Hon'ble Supreme Court in case of Dhwarka Prasad (Supra) regarding the proviso to the section has held as under: "16. There is some validity in this submission but if, on a fair constriction, the principal provision is clear, a proviso cannot expand or limit it. Sometimes a proviso is engrafted by an apprehensive draftsman to remove possible doubts, to make matters plain, to light up ambiguous edges. Here, such is the case. In a country where factories and industries may still be in the developmental stage, It is not unusual to come across several such units which may not hav....
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....r to which it is a proviso. It is not a separate or independent enactment. 'Words are dependent on the principal enacting words, to which they are tacked as a proviso. They cannot be read as divorced from their context' (1912 A.C. 544). If the rule of construction is that prima facie a proviso should be limited in its operation to the subject matter of the enacting clause, the stand we have taken is sound. To expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light on each other and result in a harmonious construction." 24. In view of the above analysis of the provisions of the Act, the decided case laws and reliance placed by the respondents on the decisions in cases of M/s. Megha Engineering & Infrastructures Ltd. (Supra), M/s RSB Transmissions (India) Limited (supra) and India Yamaha Motors Private Limited (Supra) taking a contrary view, are not in line....
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....to cost." 12. It is also emerging from the record more particularly from the averments made in the affidavitin-reply of the respondent authorities reproduced herein above to the effect that there is no dispute with regard to the debit from electronic cash ledger by the petitioner Company as the amount of tax and interest was already deposited in electronic cash ledger by the petitioner on 19.09.2017 and thereafter from the electronic cash ledger the same amount is adjusted towards tax and interest in Form GSTR 3B. Therefore, the contention of the respondent authorities that interest would continue to be accrued from 20.09.2017 till 14.08.2018 would not be sustainable in view of the aforesaid decision of this Court in case of Arya Cotton Industries and Anr. (supra), wherein the similar issue is determined to the effect that once the amount is credited in the electronic cash ledger towards payment which cannot be withdrawn or utilised in any manner by the assessee except for payment of tax liability as per the returned filed, the assessee cannot be saddled with the interest liability from the date of deposit in the credit of the electronic cash ledger till date of filing of ....
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....ase of Refex Industries Limited Vs. Asstt. Commr. of CGST & C. Ex., Chennai[2020 (34) G.ST.L. 588 (Mad.)] which reads as under: "The petitioners are registered as assessees under the provisions of the Central Goods and Service Tax Act, 2017 (in short 'CGST Act'). The petitioners have admittedly filed Returns of income belatedly for the period 2017-18. Communications dated 07.05.2019 (in W.P. No. 23360 of 2019) and 15.05.2019 (in W.P. No. 23361 of 2019) computing the delay in filing of Returns and consequently the interest to be remitted on the tax accompanying the Returns were issued by the 2 nd respondent in the following terms: W.P. No. 23360 of 2019: Sl. No. Month Delay (No. of days) Duty paid (in Rs.) Interest to be paid @ 18% 1. August - 17 140 5016431 346340 2. September 17 110 2103842 114126 3. October - 17 81 817158 32642 4. November-17 51 817158 20552 5. December -17 18 629658 5589 6. January - 18 91 5312557 238410 7. February - 18 63 1566965 48683 8. March - 18 32 22789660 359640 T....
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....ose the representation of the petitioner in that case to the effect that there would be no liability to interest in regard to the ITC available with the Department. 6. As against the aforesaid order, Writ Appeals were filed before the Division Bench and by order dated 23.07.2019, the two Hon'ble Judges expressed divergent views. One Judge dismissed the Writ Appeals, whereas the second Judge was of the view that the legal issue on the leviability of interest called for a deeper consideration than had been extended by the learned single Judge at the stage of admission and such summary dismissal required revisiting. 7. The matter was thus referred to a Third Judge, who by his order delivered on 19.12.2019, held that Writ Appeals of the Revenue were not warranted, since the learned single Judge had not in the original instance determined the legal issue in a manner detrimental to the Revenue, but only remitted the matter back to the Assessing Officer to determine the quantum of liability. The aforesaid orders are circulated for my benefit by learned counsel. 8. The question crystallised by the Third Judge for consideration is as to whether interest on bel....
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....n output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent, as may be notified by the Government on the recommendations of the Council." 11. The Section provides for interest on belated payment of tax and as held by the third Judge, such levy is 'automatic', and is intended to compensate the revenue for the remittance of tax belatedly and beyond the time frames permitted under law. Though in the context of the Income Tax Act, 1961, the question of whether remittance of interest under Sections 234 A, 234B and 234C of the Income Tax Act, 1961 for belated filing of return, belated remittances of advance tax and deferment of advance tax are mandatory came to be considered by the Supreme Court in the case of Commissioner Of Income Tax, Mumbai vs Anjum M.H. Ghaswala & Ors (252 ITR 1), and held to be compensatory and hence mandatory. The principle of the said judgment applies on all fours to the present case. 12. The specific question for resolution before me is as to whether in a case such as the present, wh....
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.... view, be read as clarificatory and operative retrospectively. 16. Learned counsel for the petitioners also draw my attention to the decision of the Telengana High Court in the case of Megha Engineering and Infrastructures Ltd. V. The Commissioner of Central Tax and others (2019-TIOL-893), where the Division Bench interprets Section 50 as canvassed by the Revenue. The amendment brought to Section 50(1), was only at the stage of press release by the Ministry of Finance at the time when the Division Bench passed its order and the Division Bench thus states that 'unfortunately, the recommendations of the GST Council are still on paper. Therefore, we cannot interpret Section 50 in the light of the proposed amendment'. Today, however, the amendment stands incorporated into the Statute and comes to the aid of the assessee. 17. In the light of the above discussion, these Writ Petitions are allowed and the impugned notices are set aside. No costs. Connected Miscellaneous Petitions are closed." 13. As held by the Madras High Court and Gujarat High Court in the aforementioned judgments, so long as the petitioner had deposited the cash portion of the tax liability....