Jayashree Enterprises Vs Assistant Commissioner (ST) (Madras High Court)
The Madras High Court considered a writ petition challenging an order dated 12.02.2025, primarily with regard to the imposition of interest under the GST enactments.
The petitioner contended that the demand arose from a discrepancy between the Input Tax Credit (ITC) reflected in GSTR-3B and the auto-populated GSTR-2A. According to the petitioner, such a discrepancy could not be characterised as wrongful availment and utilisation of ITC. The petitioner relied on Circular F.No.CBEC-20/01/08/2019-GST dated 18.09.2020 and the proviso to Section 50(1) of the applicable GST enactments, submitting that interest was payable only on the portion of tax discharged by debiting the electronic cash ledger and not the electronic credit ledger. It was further contended that, in the present case, the tax liability had been discharged through the electronic credit ledger. Reliance was also placed on the decision of the High Court in M/s. Maansarovar Motors Private Limited v. Assistant Commissioner, Poonamallee Division and others.
The respondents relied on Section 50(3) of the applicable GST enactments read with Rule 88B(3). It was contended that Parliament had specifically provided for cases involving wrongful availment and utilisation of ITC, and that Rule 88B(3) prescribes levy of interest from the date of wrongful utilisation until reversal of the credit.
