TMI Blog2024 (1) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... .e., on or before 20th of every month, the tax should have been paid to the Government. The last date for payment of tax to Government would be the date not later than the last date on which he is required to furnish the monthly return. Thus, for payment of tax to Government filing the monthly returns is not the matter but the last date for furnishing the monthly return is important. Thus, whether the monthly return is filed in time or not but the GST has to be remitted not later than the last date for filing the monthly returns. How the tax to be paid to the Government? - HELD THAT:- For the payment of tax to the account of Government, the filing of GSTR-3B is immaterial, which means either with or without filing of monthly returns, the tax can be remitted to the Government. Therefore, no interpretation can be made as held in the judgement of the Hon'ble Division Bench of Jharkand High Court rendered in M/S. RSB TRANSMISSIONS INDIA LIMITED VERSUS UNION OF INDIA THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NEW DELHI THE COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX CENTRAL EXCISE, JAMSHEDPUR THE SUPERINTENDENT OF CENTRAL GOODS AND SERVICES TAX CENTRAL EXC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agadam, Vallam and Tiruvottiyur. The petitioner is operating through their dealers and distributors and by means of more than 1000 large stores and 900 studio stores in major cities and also having more than 800 authorized dealers in India alone. 3.2 The petitioner has paid a sum of Rs. 15,033 Crores as GST for the period from the year 2017-18 till the year 2023. Out of the said amount, a sum of Rs. 10,871 Crores was paid using the Input Tax Credit and a sum of Rs. 4,162 Crores was paid in cash. 3.3 On the date of introduction of GST i.e., 01.07.2017, the petitioner had an accumulated balance of a sum of Rs. 33,87,10,445/- as CENVAT credit ready to be transitioned into the GST regime. However, owing to want of system readiness and technical glitches in the GST Common Portal during the initial stages of implementation of GST, the Department had extended the due dates for filing the Form GST TRAN-1 from time to time and accordingly, the petitioner had filed their Form GST TRAN 1 on 16.10.2017 under Sections 140(1) and 140(3) of the Goods and Services Tax Act, 2017 (hereinafter called as GST Act ). 3.4 Due to unknown reasons, the credit in entirety sought to be transitioned was not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 30% of the interest amount demanded in the Letter dated 16.05.2023. Aggrieved by the said interim order dated 07.06.2023, the petitioner had preferred an appeal in W.A.No.1263 of 2023 before the Hon'ble Division Bench of this Court. In the said writ appeal, an order came to be passed on 20.06.2023, wherein the Hon'ble Division Bench of this Court had directed the 1st respondent to consider the petitioner's representation dated 29.05.2023 and pass an order within a period of 3 weeks. 3.7 Pursuant to the said order dated 20.06.2023, the Department considered the petitioner's representation and passed an order dated 12.07.2023 confirming the demand of interest against the petitioner. Aggrieved over the said order dated 12.07.2023, the petitioner had filed W.P.No.22013 of 2023. 3.8 The common issue involved in both these writ petitions is as to whether the petitioner is liable to pay interest of the GST amount, which was routinely deposited into the ECL within the due date. However, the case of the Department is that the deposit of tax in Electronic Cash Ledger would not amount to payment of tax and would tantamount to failure to remit GST in time, for which interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to technical glitches in the filing of Form TRAN 1 was recognised and as a result, the GST Implementation Committee had approved the waiver of Late Fee on such delayed filing. 4.5 Further, he would contend that in the present case, there is no element of withholding of tax as the petitioner had rightly deposited the amount into ECL on time. Therefore, since there is no basis to levy the demand for interest by the Department and Section 50(1) of GST Act is not attracted in this case. 4.6 It is also brought to the knowledge of this Court by the learned Senior counsel that a query was raised under the Right to Information Act, 2005 (hereinafter called as RTI Act ) on how the GST collection figure is arrived at by the Government and the RTI response, which was issued by the Ministry of Finance Department of Revenue, set outs that GST collection figures are prepared on the basis of the amount deposited in the electronic cash ledger. 4.7 Further, it was submitted that a writ petition in W.P.No.20158 of 2023 has been filed by the petitioner challenging the retrospective operation of the proviso to Section 50(1) of the CGST Act and Rule 88B(1) and (2) of the CGST Rules and the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansitional credit will be credited to the ECL of the petitioner. Hence, he would submit that the non-availability of Transitional Input Tax Credit has no bearing for filing the mandatory monthly returns in GSTR-3B on the 20th day of the succeeding month. 5.4 Further, he would contend that though the time for filing the TRAN-1 was extended by the Government from time to time, there was no extension to file the monthly returns in Form GSTR-3B. Therefore, since the transitional credit can be availed as and when it is credited to the ECL and as and when Form TRAN-1 was filed by the respondent, the reasons assigned by the petitioner for non-filing of monthly returns is not correct. 5.5 He would also submit that there is no reason for the petitioner to retain the GST collected from their customers to the tune of Rs. 527.54 Crores and detain the same in the ECL for non-availability of TRAN-1 credit of Rs. 33,87,10,445/-. Since the petitioner is only an authorised agent to collect the GST on behalf of the Government, they should be responsible to remit the same on or before the 20th of succeeding month, failing which will attract the compensatory interest under Section 50 of the GST Act. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Jammu and Kashmir reported in (1984) 2 SCC 456; (x) Prahlad Rai vs. Sales Tax Officer reported in (1991) Supp (2) SCC 612; (xi) Commissioner of Sales Tax vs. Qureshi Crucible reported in (1993) Supp (3) SCC 495; 6. I have given due consideration to the submissions made by Mr.Vijay Narayan, learned Senior counsel appearing for the petitioner and Mr.A.P.Srinivas, learned Senior Standing Counsel appearing for the respondents and also perused the materials available on record. 7. In the present case, on the date of introduction of GST i.e., 01.07.2017, the petitioner had an accumulated balance of a sum of Rs. 33,87,10,445/- as CENVAT credit ready to be transitioned into the GST regime. However, due to the technical glitches and other difficulties faced by the assessees, the petitioner was not able to file the GST TRAN- 1 in time, however, the Department had extended the due dates for filing the Form GST TRAN-1 from time to time and accordingly, the petitioner had filed their Form GST TRAN 1 on 16.10.2017 under Sections 140(1) and 140(3) of the GST Act. 8. Further, since Form GST TRAN 1 was not filed in time by the petitioner, the credit in entirety sought to be transitioned was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to waive late fee on delayed filing of FORM GSTR-3B in such cases. He further stated that to enable such waiver through notification, a class of taxpayers has to be defined for the 17,573 such identified cases, CEO, GSIN replied that the formulation of such definition and the list of 17,573 taxpayers would be prepared by GSTN 4.10.2. Special Secretary, GST Council observed that such waiver/reversal of the late fee may be conditional upon the taxpayers authenticating and filing FORM GST TRAN-1 and associated FORM GSTR-3B by 30.04.2018 and 31.05.2018 respectively. 4.10.3. After discussion, GIC approved the following: i. Waiver of late fee on such delayed filing of FORM GSTR-3B of taxpayers who could not submit FORM GST TRAN-1 due to technical errors. ii. Such waiver shall be conditional upon the taxpayers authenticating and filing FORM GST TRAN-1 and associated FORM GSTR-3B by 30.04.2018 and 31.05.2018 respectively. iii. GSTN shall prepare a formulation defining 17,573 taxpayers to enable preparing of notification and also send the list of 17,573 taxpayers to the GST Policy Wing. 11. A perusal of the above minutes of GST Council shows that they had waived the late fee for belated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Form GSTR-3B returns. The following table also shows the actual due date for filing of Form GSTR-3B returns for the respective months and the date on which the Form GSTR-3B returns were filed by the petitioner: Month (2017) Due date for filing Form GSTR 3B Date of filing Form GSTR 3B July 28.08.2017 24.01.2018 August 20.09.2017 31.01.2018 September 20.10.2017 02.02.2018 October 20.11.2017 07.02.2018 November 20.12.2017 07.02.2018 December 22.01.2018 14.02.2018 18. Though there was a delay in filing the returns, the entire tax amount has been deposited in time to the Government without any delay in the manner stated above at paragraph No.16. 19. According to the respondent, the amount available in ECL will be transferred to the Government by virtue of debiting the payment therefrom towards tax, interest, penalty, fee or any other amount. Debiting the said payment would occur only on the date when the petitioner file the Form GSTR-3B returns. Thus, it was contended if there is any delay in filing the Form GSTR-3B returns, the interest will be accrued in terms of provisions of Section 50 of the GST Act. 20. The further contention of the respondent was that the amount available in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f various High Courts and Hon'ble Apex Court. In such view, it would be apposite to extract the provisions of Section 39(1) of the Act, which states as follows: 39. Furnishing of 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, in such form and manner, and within such time, as may be prescribed, on or before the twentieth day of the month succeeding such calendar month or part thereof. 25. A reading of the above provision will reveal that every Registered person has to file the returns for every calendar month or part thereof electronically to furnish the following details: a) inward and outward supply of the goods or services or both; b) input credit available; c) tax payable; d) tax paid; e) such other particulars; 26. In view of the above, it is clear that in the mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said form irrespective of time of filing the GSTR-3B, whether it is before or after the due date for filing the returns. 32. Now let me examine as to what is the last date for payment of tax, by a registered person, to the Government? For this purpose, it is just and necessary to extract the provisions of Section 39(7) of the Act, which reads as follows: 39 . (7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return. 33. A reading of the above provisions will reveal that every registered person, who is required to furnish the returns under Sub- Section (1) of Section 39 of the Act, shall pay the tax dues to the Government as per such return not later than the last date, on which he is required to furnish such return. Thus, it is clear that not later than the last date of filing of Form GSTR-3B, i.e., on or before 20th of every month, the tax should have been paid to the Government. The last date for payment of tax to Government would be the date not later tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while filing the the monthly returns in Form GSTR-3 or GSTR-3B, the registered person/assessee has to state the amount of tax paid, which means before the filing of returns, the tax should have been paid. 37. Further, Section 39(7) of the Act states that the tax should have been paid to the Government before the last date for filing the GSTR-3B returns, which means the instance of payment of tax would occur not later than the last date of filing of GSTR-3B returns. Thus it is immaterial whether GSTR-3B is filed within due date or not for remittance of tax to the account of Government. In view of the above, it is not correct to state that the instance of payment of tax to Government would occur only upon the filing of GSTR-3B return and thereafter by debiting the electronic credit ledger or electronic cash ledger. The assessees have been maintaining said ledgers, only for the purpose of accounting, while, the entire tax to be paid to the Government directly by using the Form GST PMT-06 not later than the last date for filing the Form GSTR-3B. 38. The GST, which has been collected by a registered person by virtue of sale or otherwise, is the amount of the Government and thus, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forever. From the moment it is deposited by generating GST PMT-06, it is the money of the exchequers, since the money was collected only under the name of the exchequer in the form of GST. 41. A combined reading of aforementioned provisions of Section 39(1), 39(7) and Explanation (a) to Section 49(11) of the Act along with Forms viz., Form GST PMT-06, Form GSTR-3 and Form GSTR-3B makes it clear that the payment of tax will always be made not later than the last date for filing the GSTR-3 or GSTR-3B monthly returns, i.e., on or before 20th of every month. 42. Thus, the submissions of the learned Senior Standing counsel for the respondents that the GST can be paid only after filing the GSTR- 3B, is against the provisions of Sections 39(1), 39(7) and Explanation (9) to Section 49(11) of the Act. 43. As discussed above, for the payment of tax to the account of Government, the filing of GSTR-3B is immaterial, which means either with or without filing of monthly returns, the tax can be remitted to the Government. Therefore, no interpretation can be made as held in the judgement of the Hon'ble Division Bench of Jharkand High Court rendered in RSB Transmission case (referred supra) sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act deals with the amount to be credited to the Electronic Cash Ledger i.e., every deposit made towards the tax, interest, penalty, fee or any other amount shall be credited to the Electronic Cash Ledger of such person to be maintained in such manner as may be prescribed. Further, as discussed above, the explanation (a) to Section 49(11) of the Act clearly states that any tax amount, which is to be paid by generating GST PMT-06, will be directly credited to the account of the Government and thereafter, for the purpose of accounting, it would deemed to be credited to the Electronic Cash Ledger, which is only for the limited purpose of the quantification of the liability towards GST and to verify as to whether the entire liability has been paid/ deposited/ discharged by the registered person in accordance with the provisions of the Act and Rules made thereunder. It is not that the discharge has been made only when the debit entries are made since whenever the amount is deposited or credited to the Government, that will be the actual date of discharge of tax liability to the extent of deposit and the ECL is only a ledger which will ultimately ensure the discharge of tax liabilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish the monthly returns in terms of Section 39(7) of the Act, otherwise, the tax has to be paid along with interest in terms of the provisions of Section 50(1) of the Act. Thus, the prescribed date mentioned in Section 50(1) of the Act refers to the last date for payment of GST in terms of the provisions of Section 39(7) of the Act. 52. In the present case, the notice was sent in terms of the proviso to Section 50(1) of the Act, whereby called upon the petitioner to pay interest. At this juncture, it would be apposite to extract the proviso to Section 50(1) of the Act hereunder: 50. Interest on delayed payment of tax. (1)................... Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger. 53. The above proviso deals with the interest on tax payable in respect of supplies made during a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is confined to that case. It is a qualification of the preceding enactment which is expressed in terms too general to be quite accurate. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment and ordinarily, a proviso is not interpreted as stating a general rule. If the language of the enacting part of the statute does not contain the provisions which are said to occur in it you cannot derive these provisions by implication from a proviso. Said Lord Watson in West Derby Union v. Metropolitan Life Assurance Co. (1897 AC 647)(HL). Normally, a proviso does not travel beyond the provision to which it is a proviso. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other. ( See A.N. Sehgal and Ors. v. Raje Ram Sheoram and Ors . (AIR 1991 SC 1406), Tribhovandas Haribhai Tamboli v. Gujarat Revenue Tribunal and Ors . (AIR 1991 SC 1538) and Kerala State Housing Board and Ors. v. Ramapriya Hotels (P)Ltd. and Ors . (1994 (5) SCC 672). This word (proviso) hath divers operations. Sometime it worketh a qualification or limitation; sometime a condition; and sometime a covenant (Coke upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned Senior Standing counsel for the respondent had contended that no tax amount will be passed on to the Government until the filing of Form GSTR-3B. In such case, merely for taking the refund from ECL, without even passing on the said amount to the Government, why should the Government has to pay the interest for delay in refund at the rate of 6%? Therefore, the submission of the learned Senior Standing counsel, that no tax amount will be passed on to the Government until filing of GSTR-3B, would be contrary to Section 54(12) read with 39(7) of the Act. 60. The respondent's further contention was that as long as the amount is available to the credit of Electronic Cash Ledger, the tax amount would be retained until the suitable debit entries are made by filing GSTR3B. If it is so, then why should Section 54(12) of the Act dealt with the refund with interest for getting back the excess amount of tax paid by a registered person. Therefore, as discussed above, Electronic Cash Ledger is maintained only for the accounting purpose and ultimately to determine the final tax liability and to verify the payment of said tax liability within the time prescribed under the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm GSTR-3B and 61(2) states about the discharge of liability towards the tax, interest, penalty, fees and any other amount under the Act by debiting the electronic cash or credit ledger and include the details in the GSTR-3B returns. 63. As discussed above, once GSTR-3B is filed, the total amount of tax would be quantified, by which it would be ascertained about the discharge of tax liabilities. In terms of Rule 61(1), the registered person has to file the monthly return on or before 20th of succeeding month. 64. As far as Rule 61(2) is concerned, it deals with the discharge of liability in terms of Section 49(1) of the Act. This Court had already discussed above elaborately about when the instance of discharge of tax liability would occur. 65. Further, a reference was also made to Rules 87(6) and 87(7), which is extracted hereunder: Rule 87. Electronic Cash Ledger.- (6) On successful credit of the amount to the concerned government account maintained in the authorised bank, a Challan Identification Number shall be generated by the collecting bank and the same shall be indicated in the challan. (7) On receipt of the Challan Identification Number from the collecting bank, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tures of the case, noticed above i.e. consistent practice followed by the assessee and accepted by the Revenue; the decisions of the two High Courts in favour of the assessee which have attained finality in law; and no contrary view of any other High Court being brought to our notice, should lead us to the conclusion that the High Courts were justified in taking the view that the advance deposit of central excise duty constitutes actual payment of duty within the meaning of Section 43B of the Central Excise Act and, therefore, the assessee is entitled to the benefit of deduction of the said amount. 68. In the aforesaid case, the interpretation, which was made with regard to the deposit made to the PLA, is squarely applicable to the present case, since in the present case, the issue is with regard to the ECL, which is equivalent to PLA. 69. Further in the judgement of Megha Engineering and Infrastructures Limited vs. CCT reported in MANU/TL/41/2019 , which was rendered by Telangana High Court, it has been held as follows: 37. In other words, until a return is filed as self-assessed, no entitlement to credit and no actual entry of credit in the electronic credit ledger takes place. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Private Limited vs. Union of India reported in 2020 (38) G.S.T.L. 289 (Guj.) , the Gujarat High Court had taken a view, which is similar to the view of this Court and held as follows: 12. From the facts as emerging from the record, it is manifest that despite the fact that the petitioner had approached them at the earliest point of time, the respondent authorities maintained silence for a considerable period of time and did not provide remedial measures till directed by this court. The errors in uploading the return were not on account of any fault on the part of the petitioner but on account of error in the system. In these circumstances, it would be unreasonable and inequitable on the part of the respondents to saddle the petitioner with interest on the amount of tax payable for August 2017, despite the fact that the petitioner had discharged its tax liability for such period well within time. 13. The respondents, in paragraph 19 of their affidavit-in-reply, have submitted that CIN is generated after deposit of money by the petitioner for the purpose of payment of tax. CIN is generated by the authorised banks/ Reserve Bank of India (RBI) when payment is actually received by su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as discharge of the petitioner s tax liability of August, 2017 within the period stipulated under the GST laws. Consequently, the petitioner would not be liable to pay any interest on such tax amount for the period from 21.9.2017 to October, 2019. 72. In view of the above finding and following the law laid down by the Gujarat High Court in the aforesaid Vishnu Aroma case, since in the present case, the tax amount has already been credited to the Government within the prescribed time limit, i.e., before due date, the question of payment of interest would not arise. Under these circumstances, this Court passes the following orders: 1) The credit to the account of Government would always occur not later than the last date for filing the monthly returns in terms of the provisions of Section 39(7) of the Act. 2) Once the amount is paid by generating GST PMT-06, the said amount will be initially credited to the account of the Government immediately upon deposit, at which point, the tax liability of a registered person will be discharged to the extent of the deposit made to the Government. Thereafter, for the purpose of accounting only, it will be deemed to be credited to the ECL as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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