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2021 (3) TMI 1139 - HC - GSTValuation - interest on delayed payment of tax to be charged on gross liability or net liability - section 50 of the CGST Act - issuance of DRC 01 under Section 50 of the CGST Act, 2017, legal or not - HELD THAT:- Going by amendment proposed in Finance Bill, Section 50 of the CGST Act, 2017 vide clause 103 of the Finance Bill, 2021, the interest under Section 50 of the CGST Act, 2017 can only be levied on the net tax liability and not on the gross tax liability. In such circumstances, the demand raised by the respondent is not in accordance with law. Whether issuance of DRC 01 under Section 50 of the CGST Act, 2017 is legal and proper? - HELD THAT:- The plain reading of Rule 142(1)(a) of the Central Goods and Service Tax Rules, 2017 indicates that Form GST DRC 01 can be served by the proper officer along with the notice issued under Section 52 or Section 73 or Section 74 or Section 76 or Section 122 or Section 123 or Section 124 or Section 125 or Section 127 or Section 129 or Section 130 and that too, electronically as a summary of notice - there are no reference of any notice under Section 50 so far as Rule 142(1)(a) of the CGST Rules is concerned. In such circumstances, DRC 01 could not have been issued for the purpose of recovery of the amount towards interest on delayed payment of tax. If the amount towards interest on delayed payment of tax is to be recovered, then what is the Form in which the notice is to be issued? - HELD THAT:- The aforesaid provisions make it abundantly clear that notwithstanding anything contained in section 73 or Section 74, if there is any amount of interest payable on tax and which had remained unpaid, the same has to be recovered under the provisions of Section 79 - Rule 142 makes it clear that the order referred in subrule (5) shall be treated as the notice for recovery. Thus, it can be concluded that the notice should have been issued in Form GST DRC 07. The Notice should specify the amount of tax, interest and penalty payable by the person chargeable with tax - the Form GST DRC 01 could be said to have been issued without any authority of law. The impugned order issued in GST DRC 01 is hereby ordered to be quashed and set aside - Application allowed.
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