TMI Blog2022 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment . There are any number of situations where credit may be found to have been availed erroneously or on a mistaken interpretation of law. Thus, it would be risky, from the view-point of the revenue, to state as a general proposition that the mere availability of electronic credit should be assumed to be utilization that would insulate the petitioner from the levy of interest. Thus, unless an assessee actually files a return and debits the respective registers, the authorities cannot be expected to assume that available credits will be set-off against tax liability. The specific issue raised relates to the levy of interest u/s 50 of the Act in a situation where the petitioner has not filed its returns of turnover for a particular period and the remittance of taxes for the aforesaid periods is admittedly belated. The petitioner argues that no interest need be levied on the strength of the balances lying to its credit in the ECR and ECrR. - The issue decided against the assessee. - WP.No.19044 of 2019 And WMP.No.18404 of 2019 - - - Dated:- 29-8-2022 - Hon ble Dr. Justice Anita Sumanth For the Petitioner : Mr.N.Prasad For the Respondents : Mr.N.Santhanaraman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 for production of orders. 3.Consequent upon the direction as aforesaid, the petitioner has appeared before the respondent and advanced submissions, pursuant to which, an order has been passed on 18.01.2021 accepting one portion of the submissions made. The petitioner has sought and has been granted permission to raise additional grounds addressing what remained of the grievance under order dated 10.04.2019, as covered under order dated 18.01.2021 and the respondent has also filed an additional counter. Pleadings are thus complete. 4. What follows in the succeeding paragraphs of this order addresses the contents of order dated 18.01.2021 alone, and the prayer in this writ petition thus stands moulded, to this extent. The levy of interest u/s 50 of the Act, arises from the fact that when the petitioner filed a GSTR 3B return for the month of July, 2017, there was an inadvertent error whereby the data pertaining to its plant at Faridabad was included instead of data pertaining to the Chennai plant. 5. This swap resulted in a short disclosure of liability for the period July to October 2017 leading to the levy of interest. The petitioner had filed a grievance petition see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is that the same logic that has merited acceptance by GST authorities in relation to the cash balance, should apply in the context of credit balance as well. 10. It may be recalled that there was substantial litigation in the context of levy of interest under Section 50 of the Act in cases where the assessee concerned had sufficient cash credit. This Court, in Refex Industries Limited vs The Assistant Commissioner of CGST and Central Excise, (order dated 06.01.2020 in W.P.Nos.23360 23361 of 2019) took note of the amendment to Section 50 that had been inserted by Act No.23 of 2019. The conclusion was that the proviso should operate retrospectively and thus, in a case where an assessee had sufficient cash credit, there is no question of the Department requiring to be compensated, since funds were available with it, to the credit of that assessee. 11. While it is the above reasoning that is found favour with the respondents qua cash credits, a distinction is sought to be made qua cash credits and credits available in the ECR and ECrR. While payments in cash denotes the actual availability of cash to the credit of the assessee concerned/petitioner, deposits stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereas the amount will go to the Government Exchequer only when the Return is filed and amount is debited from the Electronic Cash Ledger towards tax liability. Hence mere generation of e-challans is inconsequential unless the Return I filed and a debit towards actual tax liability arising from the Return, is made electronically in the Electronic Cash Ledger . The date of debit of tax payable in the Ledger operated by the common portal is the date of payment of tax. Such debit of tax would arise only in the event of filing of statutory Return. 4.2.3.From the foregoing discussions, it is evident that unless the GST Registrant files the Returns and a debit entry towards tax liability is made in the Electronic Credit and Cash ledgers, in respect of the tax liability for the relevant tax period, it cannot be considered as tax payment made. In this regard, the observations of the Honorable Telangana High Court, in the Writ Petition No.44517 of 2018 filed M/s.Megha Engineering Infrastructures Ltd, are relatable to the discussions made above. 13. The contention of the petitioner has been rejected to this extent, and liability computed as follows: 4.9. Calculation of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 693 23,18,465 Aug-17 18,36,76,200 4,83,127 4,83,127 18,46,42,454 20.09.17 14.12.2017 85 77,39,807 Sep-17 5,38,91,358 12,17,481 12,17,481 5,63,26,320 20.10.17 20.12.2017 61 16,94,419 Oct-17 83,45,296 7,82,906 7,82,906 99,11,108 20.11.17 20.12.2017 30 1,46,630 Total 25,27,02,684 25,91,992 25,91,992 25,78,86,668 1,19,02,178 Table-B 4.9.3. Further to the judicial precedents discussed above, it is an established principle of law that interest is compensatory in nature. Hon'ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion of the tax that is paid by debiting the electronic cash ledger. 16. That apart, there is some force to the submissions of the respondents that credit cannot, prior to availment be taken to construe the payment . There are any number of situations where credit may be found to have been availed erroneously or on a mistaken interpretation of law. Thus, it would be risky, from the view-point of the revenue, to state as a general proposition that the mere availability of electronic credit should be assumed to be utilization that would insulate the petitioner from the levy of interest. Thus, unless an assessee actually files a return and debits the respective registers, the authorities cannot be expected to assume that available credits will be set-off against tax liability. 17. Learned counsel for the petitioner relies upon a judgment of the Hon ble Supreme Court in the case of Union of India Vs Bharti Airtel Limited Ors (2021 (11) TMI 109- SC) . The aforesaid judgment had been rendered in the context of rectification of Form GSTR-3B by that assessee. The challenge before the High Court had related to the timelines for filing of GSTR-3B and revision thereof and the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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