Case Law Details
Tvl. Sai Cashew Processors Vs Deputy State Tax Officer (Madras High Court)
The writ petition challenges an order dated 13.03.2025 passed pursuant to a remand by the Madras High Court on 16.08.2024. The earlier remand directed the respondent to pass a fresh order subject to the petitioner depositing 10% of the disputed tax. The petitioner had originally challenged three separate orders dated 31.07.2023, 14.12.2023, and 22.12.2023.
Following the remand, the petitioner paid ₹2,88,181 on 21.11.2024 and an additional ₹77,201 on 16.10.2024. The impugned order recorded total payments of ₹3,65,382 and noted an excess payment of ₹1,73,365, though part of the payment was disregarded. The tax demand arose from defects including mismatch between GSTR-3B and GSTR-1, under-reporting of turnover, and non-payment of tax on certain charges.
The impugned order also levied interest of ₹2,34,639 under Section 50(1) of the GST Act, 2017, along with penalty. The petitioner contended that the excess payment should have been adjusted against the interest and penalty.
The Court observed that since the petitioner admitted tax liability, interest on delayed payment was payable. However, it held that there was no justification for imposing penalty under Section 73 of the GST Act, 2017. The Court also noted doubts regarding the correctness of the interest calculation.
Accordingly, the matter was remitted back to the respondent to determine the correct interest liability after adjusting the excess payment of ₹1,73,365. Any remaining balance may be recovered. The petitioner was permitted to submit a representation regarding the penalty. The writ petition was disposed of without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mrs K. Vasanthamala, learned Government Advocate takes notice for the Respondent.
2.This Writ Petition is being disposed of at the stage of admission itself with the consent of the learned counsel for the Petitioner and the learned Government Advocate for the Respondent.
3.The present writ petition is against the impugned order dated 13.03.2025 which has been passed pursuant to the remand order of this Court dated 16.08.2024 in WP.Nos.13066, 13068 & 13071 of 2024 by the aforesaid order the Court had directed the respondent to pass fresh order in view of the impugned order therein subject to the petitioner depositing 10% of the disputed tax. In the said writ petition the petitioner had challenged three separate orders all dated 14.12.2023, 22.12.2023 and 31.07.2023.
4. Pursuant to the remand order the petitioner paid a sum of Rs.2,88,181/- on 21.11.2024. Over and above the amount the petitioner appears to paid an amount of Rs.77,201/- on 16.10.2024 which is disregarded in the impugned order. The impugned order earlier records that the petitioner has paid an excess amount of Rs.1,73,365/-. The impugned order records that the petitioner has paid a sum of Rs.3,65,382 as detailed below.
| Sl. No. | Details of Tax | Abstract of amount (Rs.) of Demand | ||||
| IGST | CGST | SGST | CESS | Total | ||
| 1. | a) Defect 1-GSTR-3B vs GSTR-1 Out mismatch (Tax) | 77201 | 8750 | 8750 | 0 | 94701 |
| b)Defect 3-Less turnover reported in GSTR 3B (Tax) | 0 | 47350 | 47350 | 0 | 94701 | |
| c)Defect 5-Nonpayment of tax for Loading and Unloading charges income credit on capital goods (Tax) | 0 | 1308 | 1308 | 0 | 2616 | |
| 2. | Total Tax amount to be payable | 77201 | 57408 | 57408 | 0 | 192017 |
| 3. | a) Tax payer had paid against demand on 16.10.2024 (LESS) | 77201 | 0 | 0 | 0 | 77201 |
| b) Tax payer had paid tax portion of 10% on 21.11.2024(LESS) |
7721 | 140230 | 140230 | 0 | 288181 | |
| 4. | Total Paid Tax Amount | 84922 | 140230 | 140230 | 365382 | |
| An Excess paid Amount (Tax) Sl. No.(2-4) | 7721 | 82822 | 82822 | 0 | 173365 | |
5.The impugned order further demands interest and penalty as detailed below:
| Details of Interest | ||||||
| 5(b) | Interest U/S.50(1) TNGST Act, 2017 for Defects 1, 3 & 5 | 90991 | 71824 | 71824 | 0 | 234639 |
6.The learned counsel for the petitioner also submits that the excess amount paid by the petitioner ought to have been adjusted towards the interest and penalty sustainable.
7.In the facts and circumstances of the case there are no justification in imposing penalty under Section 73 of the GST Act, 2017. Since there is a liability admits the petitioner is bound to pay interest under Section 50(1) of the respective GSTN Act, 2017. However, there appears some doubt as to the calculation given in the above table which has been extracted from the impugned order.
8.Considering the above, case is remitted back to the respondent to pass fresh orders on merits insofar as the correct amount interest payable by the petitioner on the belated payment of the tax as mentioned after adjusting the excess amount mentioned in the table above for a sum of Rs.1,73,365/- . Balance if any after adjustment shall be demanded from the petitioner. As far as the penalty imposed under Section 73 of the GST Act, 2017 is concerned the petitioner may give proper representation.
9.This Writ Petition stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petitions are closed.
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