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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, PRANAV TRIVEDI
Symphony Limited – Appellant
Versus
Union Of India – Respondent
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned Senior Advocate Mr. Kamal Trivedi with learned advocates Mr. Anuj Trivedi and Mr. Vinay Bairagra for the petitioners and learned advocate Mr. Ankit Shah for the respondents.
2. Both these petitions are arising out of the communications issued by the respondents for payment of interest under Section 79 of the Goods and Services Tax Act, 2017 (For Short “GST Act”).
3. In Special Civil Application No. 4464 of 2022, the petitioners have challenged the communication dated 17.11.2021 and 11.02.2022 (Annexure-B and Annexure-C respectively) and in Special Civil Application No. 821 of 2023, the petitioners have challenged the communications dated 24.08.2022, 12.09.2022 and 04.02.2023 (Annexure-C, Annexure-D and Annexure-E respectively).
4. Having regard to the controversy arising in these petitions which is in a narrow compass, with the consent of the learned advocates for the parties, the same is taken up for hearing.
5. Rule returnable forthwith. Learned advocate Mr. Ankit Shah waives service of notice of rule for and on behalf of the respondents.
6. The factual matrix giving rise to these petitions can be summarized as under:-
6.1. The brief fact
Interest under GST on delayed tax payment cannot be levied from the deposit date in electronic cash ledger until the return is filed, emphasizing compensatory nature over punitive interpretations.
The payment of GST before the last date of filing returns constitutes discharge of tax liability regardless of subsequent return delays, with no interest accruing if the tax was paid on time.
Interest for delayed tax payments under the CGST Act applies only to cash payments, as payments from input tax credits do not incur interest liabilities.
Interest on delayed tax payment under Section 50 of the CGST Act only applies to cash transactions. Payments made via Electronic Credit Ledger cannot incur interest, as funds were available and utili....
The availability of credit does not exempt an assessee from the levy of interest under Section 50 of the TNGST Act, 2017, and the compensatory nature of interest was emphasized by the court.
Payment of pre-deposit under Section 107(6)(b) of the CGST Act can be made using the Electronic Credit Ledger, validating the petitioner’s compliance.
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