Tax deposited in Government account before due date would be sufficient and therefore interest cannot be charged for late filing of return- Madras HC
In case of M/s.Eicher Motors Limited, (W.P.Nos.16866 & 22013 of 2023 W.M.P.Nos.17280, 16111, 21382 & 21384 of 2023) Madras high Court held that, if the GST was collected by a registered person, is credited to the account of the Government before last date for filing the monthly returns, to that extent, the tax liability of such registered person will be discharged from the date when the amount was credited to the account of the Government. And taxpayer is not liable for Interest, to that extent, return is filed after due date.
Fact of the case:- The petitioner is a renowned manufacturer of mid-sized motorcycles in Tamil Nadu states for the initial period of GST, taxpayers have credit of CENVAT, however due to technical glitches in the GST portal, was not made available in Electronic Credit Ledger, the petitioner could not file the monthly return in Form GSTR-3B within due date for july 2017 and hence also not able to file subsequent returns till Dec 2017.
Though the petitioner was disabled from filing the returns, the petitioner had ensured that the tax dues are fully paid within the due dates without any delay and accordingly, the petitioner had discharged GST liability for the period from July, 2017 to December, 2017 by depositing the tax amounts in the Electronic Cash Ledger under the appropriate heads as CGST, SGST, IGST into the Government account within the due date for each month. After resolving the issue returns were filed on 24.01.2018.
Later on recovery notice from department was received for interest on late payment of tax. The recovery proceedings were initiated directly even without the issuance of show cause notice. After court intervention, Department passed an demand order.
Court finding and conclusion- 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.
As long as the GST, which was collected by a registered person, is credited to the account of the Government not later than the last date for filing the monthly returns, to that extent, the tax liability of such registered person will be discharged from the date when the amount was credited to the account of the Government. And hence squashed the demand order passed by the GST Authority.
Conclusion: The Madras High Court’s ruling provides clarity on the crucial aspect of timely GST deposit and its implications for interest on late filing. This decision reinforces the principle that if the tax amount is credited to the government within the prescribed time limit, taxpayers are exempt from interest, even if returns are filed after the due date. The case of M/s.Eicher Motors Limited sets a precedent for similar situations, offering relief to conscientious taxpayers who face procedural challenges but prioritize timely tax payments.
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