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TMI Blog2022 (11) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner has been directed to pay interest to the tune of Rs. 72,69,975.00 and demand was directed to be issued within 7 days . 2.The brief facts as reflected from record are that the petitioner is a company which involves in production of number of commodities including pet food. The pet food is a commodity which has been classified under Harmonized System Code (HSN) bearing No. 2309 after implementation of the Act, 2017. The said commodity is taxable commodity under the Act, 2017, but due to non-availability of clear instructions or notification with regard to taxation on animal and pet food, which falls in the index under Chapter 23 HSN 2309. The animal feed and pet food were sold by the petitioner's company to different distributors without charging GST and the return was filed. However, with the passage of time, when the provisions of GST emerged out of fuming condition and the fact got established that all animal feed are exempted from tax except pet food. The petitioner's company approached the authority showing the difference in its GSTR 1 & GSTR 3B and sought directions from the authorities about the mechanism to rectify its return, but on account of non-avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rala informed the petitioner that the entry 2309 is exempted from payment of tax. It has been informed vide email dated 03.04.2018 (Annexure P/6) that GST rate for the HSN Code 23091000 is 0%. The confusion was going on, therefore, frequent question was asked, wherein it has been informed that except pet food all the items are exempted from payment of GST. In the meanwhile, the petitioner has already sold the pet food without charging GST and submitted its return in the form GSTR 3B. When the petitioner came to know that the pet food is taxable, the petitioner filed GSTR 1 showing the pet food as taxable. However, since the petitioner had not availed the input credit with regard to pet food, therefore, no tax liability was outstanding towards the petitioner. It was only question to correcting the return. Thereafter, in the return for the month of March, 2018, the petitioner set off the liability by creating additional tax liability for the month of July 2017 to September 2017 and set off through available input credit, thus, the case of the petitioner was not the case of non-payment of tax. It was only setting off the tax liability and correction of return. 5.Learned Senior Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company which was sufficient to cover the tax liability. The said credit was left unutilized and there was no intention to evade any tax liability but due to lack of clarity on the mechanism to create and set off the liability the deference between the return remained unresolved. This is evident from the fact that the company has reported the correct figures in the GSTR-1 and has also left sufficient input credit to cover the additional liability so created. 7.He would further submit that in furtherance of notice dated 30.05.2018, on 20.06.018 three deferent notices were issued for SGST, CGST & IGST, wherein it has been stated that the show cause notice was issued to the tax payer on 30.05.2018 of which the tax payer has filed reply. The petitioner has already filed its reply to the show cause notice, therefore, no further reply as well as any notice was required to be issued by respondent No. 4, but ignoring the reply of the earlier show cause notice, respondent No. 4 vide its order dated 03.08.2018 has imposed the liability of interest. 8.He would further submit that though in the notice dated 20.06.2018, respondent No. 4 himself has stated that the reply has been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal purchases made and input tax credit availed and or utilized all are shown on one place so that if there is any liability after utilizing the input tax credit, the registered dealer can pay the same. 12.It has been further contended that for the month of August, 2017 to December, 2017, the petitioner has submitted Form GSTR 3B concealing the amount received on pet food sold thereby has not provided the correct information whereas it is the duty of the registered dealer to provide the correct information of tax paid as well as tax payable. If at all the petitioner was under impression whether the tax will be levied or not, he ought to have shown the amount as tax payable in form GSTR 3B, but in spite of this clear provisions, the petitioner chooses not to file correct return and states the correct details, but to file the incorrect details. It has been further contended that Section 50 of the Act, 2017 empowers the authority for levying the interest on delayed payment of tax and in the present case, since the petitioner has paid belatedly the amount of tax due for the month of August, 2017, September, 2017, October, 2017 as well as December, 2017 on 21.05.2018, therefore, due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the Gazette Notification dated 28.03.2021 mainly contending that the Government of India vide its notification dated 28.03.2021 has provided a mechanism that the tax payable in respect of supply made and declared in the return for the said period furnished after the due date in accordance of Section 39 of the Act, 2017, except where such return is furnished after commencement of any proceeding under Section 73 & 74 of the Act, 2017 shall be payable on that portion of tax which is debiting the electronic cash ledger and would submit that the petition may be disposed of in view of the amendment made by the Central Government and liberty was sought to approach the authority for deciding the appeal afresh after taking advantage of the amendment made by the Central Government which has been made effective w.e.f. 1st July, 2017. 17.The State has filed reply denying the contention raised by the petitioner and would submit that the petitioner is not entitled to get any advantage of this amended provision. 18.Before adverting to the facts of the case, it is expedient for this Court to extract Section 50 of the Act, 2017 prior to the amendment, which reads as under:- "112. In Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fective the amendment in Section 50 and giving its retrospective effect. 22.The said amendment has come up for consideration before the Hon'ble High Court of Madras in M/s. Maansarovar Motors Private Limited Vs. The Assistant Commissioner & others WPS No. 28437 of 2020 & bunch of petitions (Decided on 29.09.2020) wherein Hon'ble High Court of Madras has examined whether amendment of Section 50 should be given retrospective effect or not and has held that the same should be given retrospective effect and has held at paragraph 27 to 29 as under:- "27. Thus, the Board has yet again reiterated that the amendment by insertion of proviso of Section 50 of the CGST Act is intended to be retrospective. Perhaps the relegation of the show cause notices to the call book is to await the passing of the amendments in the central and state statutes. To my mind, the Centre, the State and the CBIC are in agreement that the operation of the proviso of Section 50 should only be retrospective and the interpretation to the contrary by the authorities constituted under the Board is, in my view, clearly misplaced as is the consequential coercive recovery. 28. Thus, notwithstanding that the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 2017 provides that no appeal shall be filed under sub-section (1) unless the appellant has paid the tax as provided in Section (a) & (b) of the said section. For better understanding Sections 39 & 107(6) of the Act, 2017 read as under:- "Section 39 - Furnishing Returns- (1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, [in such form and manner as may be prescribed], a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed [Provided that the Government may, on the recommendation of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.] (2) A registered person paying tax under the provisions of section 10 shall, for each quarter or part thereof, furnish, in such form and manner as may be prescribed, a return, electronicall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act: [Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier. (10) A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods has not been furnished by him." 107. Appeals to Appellate Authority- (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed." 24.The amendment whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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