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Welcome to our today topic Interest Delayed Payment Of Tax
Interest Cannot Be Levied In Delayed Payment Of Tax Due To Non Availability Of The Gst Portal High Court Of Kerala In Wp (c) Number. 25069 of 2023 Dated: 23-11-2023.

FACTS OF THE CASE

The present writ petition has been filed to set aside order whereby petitioner has been directed to remit the interest payable under Section 50 sub section (1) of the CGST/ SGST Act, 2017, immediately, failing which the respondent should be constrained to initiate action under Section 79 of the CGST Act. The interest calculated for the period from July, 2017 to March, 2018 is Rs: 5,30,919/- in respect of the delayed remission of the tax due on the petitioner.

According to the petitioner, for the month of July, 2017, the petitioner remitted the GST of Rs. 29,24,100/- on 21-08-2017 which was the last date for filing Form 3B return for July, 2017. However, on account of technical problem in the GST network, the tax remitted by the petitioner could not get reflected in the cash ledger appearing in the return module, and thus, the petitioner could not complete the e-filing of the return on the same day, on 21-08-2017. The petitioner sent an e-mail on 24-08-2017 to the e-mail id gst elpdesk@gst.gov.in citing the issue and seeking advise/assistance to get the credit of tax paid in the cash ledger and for filing the return. A response was received by the petitioner to the aforesaid e-mail on 05-10-2017 stating that “Transaction of Rs. 29,24,100/- on 21-08-2017 against CPIN 17083200013355 dated 18-08-2017 has been credited to your cash ledger”.

The petitioner found out that the petitioner’s GSTIN was cancelled on 24-08-2017 without any notice to him. The petitioner brought this matter to the notice of the concerned authority by e-mail on 24-08-2017 itself.

On account of the cancellation of the GSTIN on 24-08-2017, petitioner could not file return for the month of July, 2017 for which he had already paid tax on 21-08-2017, and thereafter, for the months of August, September, October and November, 2017 petitioner approached this Court by filing W.P.(C) Number. 41314 of 2017. This Court on 21-12-2017 passed an interim order directing the respondent to take expeditious action, either to restore the registration already given to the establishment of the petitioner or provide them an alternative registration, within a week.

According to the petitioner, after the said interim order was passed, the site was made available to the petitioner only on 26-12-2017 and due to non-availability of login ID or any other functionality, the petitioner could not file any return in GSTR3B or GSTR 1 for the period from July, 2017 to December, 2017. Once the site was enabled, the petitioner filed return for the month of July, 2017 on 01-01-2018, for the month of August, 2017 on 16-01-2018, for the month of September, 2017 on 17-01-2018, for the month of October,

2017 on 17-01-2018 and for the month of November, 2017 on 18-01-2018. There was only delay of two days in filing the return for the month of January, 2018 and delay of four days in filing the return for the month of March, 2018.

PETITIONER CONTENTION

Though no penalty has been imposed for delay in filing return, but the interest has been levied by the order for remitting the tax with delay after filing return. Learned Counsel for the petitioner submits that when the petitioner’s GSTIN has been cancelled without any due process having been followed illegally, and the same was restored only in pursuance to the interim order passed by this Court in W.P.(C) Number. 41314 of 2017 dated 21-12-2017, the petitioner cannot be held liable for remitting the GST with some delay inasmuch as the petitioner could not have remitted the tax without the site being made available to him for remitting the tax. Filing of the return as well as remission of tax is only online through GST portal against the GSTIN.

When the petitioner’s GSTIN stood canceled, the petitioner had no means to remit the tax and file the return, until the same was made available in pursuance to the interim order dated 21-12-2017 passed in W.P.(C) Number.41314 of 2017. The learned Counsel for the petitioner therefore, submits that the petitioner is liable for payment of interest, if any, only after twenty days from the date of restoration of the GSTIN, and not for any other period. The Department may impose the interest for any delay after 20th day from the date of restoration of the GSTIN, 26-12-2017. It is therefore submitted that the demand of interest for alleged delay in remitting the tax for the period from July, 2017 to March, 2018 is wholly unjustified and liable to be set aside.

COURT OBSERVATION & ORDER

This Court is of the view that it is highly inequitable to impose interest under Section 50 of the Income Tax Act, 2017 on the petitioner, and petitioner cannot be said to have made any default in not remitting the tax inasmuch as he could not have remitted the tax without there being a valid GSTIN. However, if the petitioner had failed to remit the tax after 26-12-2017, within twenty days thereafter, the petitioner would be liable to pay the interest under Section 50 of the CGST/SGST Act, 2017.

In the above circumstances, the present writ petition is disposed of. The impugned order is set aside and the authorities are given liberty to impose fine for delayed payment of GST after 20th day from 26-12-2017 for the period up to December, 2017. for subsequent months, if there is any delay, the petitioner is liable to pay the interest.

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