TMI Blog2022 (8) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... case admittedly a notice was issued to the petitioner dated 6.11.2018 thereafter, the petitioner duly replied in form of objection with regard to non payment of interest vide its reply dated 9.1.2019. However the respondent department vide letter dated 28.1.2019 repeated its earlier stand and refused to accept the petitioner s stand and the petitioner was directed to pay the balance amount of Rs.40,71,403/- towards interest payment after adjustment of refund amount sanctioned in favour of the petitioner. Thus, it clearly transpires that the respondents have not followed the procedure as enshrine d in Section 73 or 74 of the JGST Act. Thus the issue involved in the writ applications is squarely covered by the decision passed by this Court in the case of Mahadeo Construction. The matter is remitted back to the re venue to initiate a fresh proceeding with regard to the liability towards interest under Section 50 of JGST Act in accordance with law as stipulated in JGST Act. It goes without saying that after following the procedure and dependant on the proceedings, fresh refund order be issued in accordance with law - application allowed. - W.P.(T) No. 2043 of 2020 With W.P.(T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent department. Th e accountant of the petitioner company repeated the said claim of transitional credit for the same amount in the GSTR-3B furnished in July, 2017. The said repetition being due to human error, absence of adequate practice/familiarity in the working of the new concept of Goods and Services Tax laws, which had been introduced in 2017 itself. Immediately, in July, 2018 petitioner took step to reverse the said entry to rectify the error. In GSTR-3B of July 2018, the sum of Rs.3,11,43,255 has been reversed towards Input Tax Credit of SGST. It is specific case of the petitioner that the said amount of transitional credit mistakenly mentioned in form GSTR-3B for July 2017 was never utilized by the petitioner company against the output tax liabilities arising out of daily business transactions. A clarification was sought by the department vide letter No.225 dated 22.10.2018 regarding reversal of SGST Credit amounting to Rs.3,11,43,255. A clarification was also sought as to why no interest was paid on the said reversal of ITC. Petitioner responded to the said clarification vide letter no. BSMPL /245 dated 2.11.2018. The Respondent authority vide letter No.249 dated 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same had earlier been carried forward as transitional credit through GSTR TRAN-1 and also the same got reversed in July 2018 at the behest of the petitioner. It is the petitioner s case that no tax dues remained unpaid during this period. 2. Learned counsel for the petitioner submits that despite taking an objection to the notice at Annexure 6 dated 06.11.2019 for payment of interest in term of Section 50(3) of the JGST Act through reply dated 09.01.2019 (Annexure 9) by the petitioner, the respondents have not followed the procedure prescribed for realization of the interest. No intimation in the prescribed format or proceedings have been initiated for recovery of the interest in terms of Section 50(3) of the Act. 6. Learned counsel for the respondent re iterated the stand made in the counter affidavit and submits that the claim of the taxpayer that it made all best efforts to rectify the said error by reversal of the said Input Tax Credit but due to shortcomings in the online facilitation procedures of the respondent department the reversal of the said Input Tax Credit facilitated in the month of July, 2018 is not tenable. The procedure for matching, reversal and recla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any feature of reversal of erroneous credit taken in GSTR-3B has been added in the system in the month of July, 2018, as claimed by the petitioner and as to when has the facility of reversal of erroneous entry of credit has been activated . The said queries of the department were replied by the GSTN which is as under:- GSTR-3B was enable on the GST Portal in August, 2017. The functionality for reversal of credit was also made available in Table 4(B)(2) in this deployment of FORM GSTR-3B. The user manual deployed on the GST portal, for explaining this functionality to the taxpayers, also covers the part pertaining to ITC reversed in Table 4(B)(2), which demonstrates that this functionality was also there on the GST portal . Learned counsel concluded his argument by submit ting that the procedure for matching, reversal and reclaim of Input Tax Credit has been laid down under Section 42 of CGST Act, 2017. As per the procedure the irregularly taken SGST Credit was required to be reversed by adding the same to the output tax liability in the GSTR-3B return itself for the month of August, 2017 onwards. There is a provision in the GSTR-3B return itself to reverse the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod for which the tax or any part thereof remains unpaid. The liability to pay interest is evidently fastened on the assesse and the same has to be discharged on his own. Thus, there cannot be any two view on the liability to pay interest under Section 50(1) of the said Act. In other words, such liability is undoubtedly an automatic liability fastened on the assesse to pay on his own for the period for which tax or any part thereof remains unpaid. 28. Sub-section (2) of Section 50 contemplates that the interest under Sub section (1) shall be calculated in such manner as prescribed from the day succeeding the day on which such tax was due to be paid. Sub section (3) of Section 50 further contemplates that a taxable person who makes an undue or excess claim of input tax credit under Section 42(10) or undue or excess reduction in output tax liability under Section 43 (10) shall have to pay interest on undue or excess claim or such undue or excess reduction, at the rate not exceeding 24 percent. 29. A careful perusal of sub Sections (2) and (3) of Section 50 thus would show that though the liability to pay interest under Section 50 is an automatic liability, still the quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by each petitioners shall have to be, certainly, considered. Undoubtedly unilateral quantification of interest liability cannot be justified especially when the assesse has something to say on such quantum. The Writ Court, thus, in the above line, has disposed the writ petitions, that too, on a condition that the petitioner in each case should pay the admitted liability of interest. 33. A careful perusal of the direction issued by the Writ Court does not indicate anywhere as to how the Revenue is prejudiced by the said order, especially when the Revenue is given liberty to pass an order in a manner known to law and communicate the same to the petitioners, after considering their objections. Thus, I find that the Writ Appeals preferred against the said orders of the Writ Court, as observed by Dr. Vineet Kothari, J, are wholly unnecessary. Therefore, I am in agreement with the view expressed by Dr. Vineet Kothari, J., as I find that entertaining the writ appeal is not warranted, since the Writ Court has not determined the interest liability of each petitioners against the interest of the Revenue in any manner and on the other hand, it only remitted the matter back to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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