TMI Blog2022 (2) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in the case of MAHADEO CONSTRUCTION CO. VERSUS THE UNION OF INDIA, ASSISTANT COMMISSIONER, CENTRAL GOODS SERVICES TAX AND CENTRAL EXCISE, SUPERINTENDENT, CENTRAL GOODS SERVICES TAX AND CENTRAL EXCISE [ 2020 (4) TMI 666 - JHARKHAND HIGH COURT ] as despite disputing the liability towards interest, the revenue has raised a demand for payment of interest on the ground of delay in furnishing of GSTR-3B return for the period July 2017 to December 2019 without initiating any adjudication proceedings under Section 73 or 74 of the CGST Act, 2017. The impugned demand contained in letters dated 28th February 2020 / 2nd March 2020 (Annexure-4) is quashed - the writ petition is allowed. - W.P.(T) No. 1404 of 2020 - - - Dated:- 16-2-2022 - Hon ble Mr. Justice Aparesh Kumar Singh And Hon ble Mr. Justice Deepak Roshan For the Petitioner : Mr . Sumeet Gadodia, Advocate for the CGST : : Mr. P.A.S. Pati, Advocate ORDER Heard learned counsel for the petitioner Mr. Sumeet Gadodia and learned counsel for the respondents CGST Mr. P.A.S. Pati. 2. Interest amounting to ₹ 83,96,873/- on the alleged ground of delay in furnishing GSTR-3B return for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination and recovery of interest without initiating any adjudication process, only. Both the writ petitions were filed by separate entities however the issue is similar. The aforementioned both Writ Petitions are different and not tagged with each other. 5. Learned counsel for the CGST Mr. P.A.S. Pati has further submitted that monthly returns in Form GSTR-3B and payment of tax have been made after the due date prescribed under Section 39(1) of the CGST Act without discharging the applicable interest payable on the delayed payment of tax under Sub-Section 1 of Section 50 of the CGST Act. Further, the interest payable on such delayed payment of tax can be recovered under Section 79 read with Section 75(12) of the CGST Act. It is submitted that Rule 61(5) of the CGST Rules has been amended retrospectively w.e.f. 1st July 2017 vide notification no.49 of 2019 Central Tax dated 9th October 2019 providing that GSTR-3B shall be a return under Section 39 of the CGST Act. Further Rule 61(6) of the CGST Rules has also been omitted vide notification dated 9th October 2019. At para-14 the following statement has been made in reply to para-25 of the writ petition: 14. That with regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the parties. We have taken note of the relevant materials on record. 9. The issue at hand is whether interest liability under Section 50 of the CGST Act can be determined without initiating any adjudication proceeding either under Section 73 or 74 of the CGST Act in the event the assesse disputes its liability towards interest. It is not in dispute that no such proceeding has been initiated in the case of the petitioner, though the liability has been disputed by the petitioner by way of a reply to the notice of recovery under Section 79 of the CGST Act, 2017 vide Annexure-5 dated 9th March 2020 on specific grounds as also referred to above. The issue as on date stands answered by the decision rendered by the Coordinate Bench of this Court of which one of us (Deepak Roshan, J.) was a Member. 10. The operative portion of the judgment para-21 is quoted hereunder for better appreciation :- 21. It is not a true that liability of interest under Section 50 of the CGST Act is automatic, but the said amount of interest is required to be calculated and intimated to an assesse. If an assesse disputes the liability of interest i.e. either disputes its calculation or even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity to pay interest under Section 50 is an automatic liability, still the quantification of such liability, certainly, cannot be by way of an unilateral action, more particularly, when the assesse disputes with regard to the period for which the tax alleged to have not been paid or quantum of tax allegedly remains unpaid. Likewise, whether an undue or excess claim of input tax credit or reduction in output tax liability was made, is also a question of fact which needs to be considered and decided after hearing the objections of the assesse, if any. Therefore, in my considered view, though the liability fastened on the assesse to pay interest is an automatic liability, quantification of such liability certainly needs an arithmetic exercise after considering the objections if any, raised by the assesse. It is to be noted that the term automatic does not mean or to be construed as excluding the arithmetic exercise . In other words, though liability to pay interest arises under Section 50 of the said Act, it does not mean that fixing the quantum of such liability can be unilateral, especially, when the assesse disputes the quantum as well as the period of liability. Therefore, in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any manner and on the other hand, it only remitted the matter back to the concerned Officer to determine the quantum of such liability. Thus, the second question with regard to the maintainability of the writ appeals is answered accordingly. 11. The learned court has also answered the second issue whether recovery proceedings under Section 79 of the CGST Act can be initiated for recovery of interest under Section 50 of the Act without initiation and completion of the adjudication proceedings under the Act at para-22 of the judgment which is quoted hereunder :- 22. The next issue for adjudication in the instant writ application is as to whether garnishee proceedings under Section 79 of the CGST Act can be initiated for recovery of interest without adjudicating the liability of interest, when the same is admittedly disputed by the assesse. Section 79 of the CGST Act empowers the authorities to initiate garnishee proceedings for recovery of tax where any amount payable by a person to the Government under any of the provisions of the Act and Rules made thereunder is not paid . Since in the preceding paragraphs of our Judgment, we have already held that though the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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