Case Law Details
Refex Industries Ltd. Vs Assistant Commissioner of CGST & Central Excise (Madras High Court)
According to the petitioners, Section 50 that provides for levy of interest on belated payments would apply only to payments of tax by cash, belatedly, and would not stand triggered in the case of available ITC, since such ITC represents credit due to an assessee by the Department held as such.
The specific question for resolution before me is as to whether in a case such as the present, where credit is due to an assessee, payment by way of adjustment can still be termed ‘belated’ or ‘delayed’. The use of the word ‘delayed’ connotes a situation of deprival, where the State has been deprived of the funds representing tax component till such time the Return is filed accompanied by the remittance of tax. The availability of ITC runs counter to this, as it connotes the enrichment of the State, to this extent. Thus, Section 50 which is specifically intended to apply to a state of deprival cannot apply in a situation where the State is possessed of sufficient funds to the credit of the assessee. In my considered view, the proper application of Section 50 is one where interest is levied on a belated cash payment but not on ITC available all the while with the Department to the credit of the assessee. The latter being available with the Department is, in my view, neither belated nor delayed.
The argument that ITC is liable to be reversed if it is found to have been erroneously claimed, and that it may be invalidated in some situations, does not militate with my conclusion as aforesaid. The availment and utilization of ITC are two separate events. Both are subject to the satisfaction of statutory conditions and it is always possible for an Officer to reverse the claim (of availment or utilization) if they are found untenable or not in line with the statutory prescription. Credit will be valid till such time it is invalidated by recourse to the mechanisms provided under the Statute and Rules.
I am supported in my view by a recently inserted proviso to Section 50(1) reading as below:
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Respected Sir,
I had filed the GSTR-3B Return of March 2019, in time i.e. before 20.04.2019, but somehow fails to show correct figures of Output Tax liability, in GSTR-3B. Then, I noticed that, and shown those short paid output tax in August 2019 GSTR-3b returns. Department is asking to pay interest on that short payment. Is it payable ?. Though I had sufficient / more ITC available than this short paid tax. So, can i get the benefit of Sec 50(1) of interest levied on net cash liability ?. Please advice. Thank You.
As per the Act there is no facility to provide interest on the input credit then how the interest on such portion will be neglected , if it is correct, it will be legal incentive to the late filers.
As per the Act the there is no facility to provide interest on the input credit then how the interest on such portion will be neglected , if it is correct, it will be legal incentive to the late filers.
As per the Act the there is no facility to provide interest on the input credit then how the interest on such portion will be neglected , it is correct it will be legal incentive to the late filers.
sir very useful article in my case after filing all pending returns and after filing revocation application the assistant commissioner without specifying reason cancelled revocation application when we went for personal he only saying pay interest on net tax liability now please advise what steps to be TAKEN
A judgement waited from long time… Justice still prevails.. It has to be well communicated as early as possible to the CBIC for quick implementation by the authorities. Main portion of the judgement is interest to be calculated on the net tax liability, retrospective effect from 01/07/2017.
section 100 of Finance act 2019 inserting proviso to section 50(1) has not been notified yet. So relying upon unnotified provison is material error which would go to the roots of decision of this case.