Back
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
A. RAJASHEKER REDDY, SHAMEEM AKTHER, JJ.
Bharati Airtel Limited – Petitioner
Versus
The State of Telangana and Others – Respondents
W.P. No. 21311 of 2020
Decided On : 20-04-2021
Central Goods and Services Tax Act, 2017 - Section 54, 39 and 50 - Central Goods and Services Tax Rules, Rules, 2017 - Rule 89 - Company - Engaged in providing telecom service - Affidavit - Central Goods and Services Tax - Petitioner is M/s Bharati Airtel Limited, and as per the averments made in affidavit filed in support of writ petition, it is engaged in providing telecom services throughout India, including State - Petitioner-company is registered under Central Goods and Services Tax Act, 2017 - Petitioner was directed to pay an amount towards interest for late payment of SGST to State Government - Petitioner-company paid said amount under protest through Form GST PMT-06 bearing CPIN No. dated - Said payment of penal interest was intimated to Deputy Commissioner-EIU vide letter dated - Petitioner field reply, contending that return that is required to be filed under Section 39 of Act, read with Rule 61 of the Rules, is GSTR-3, but as the same was kept under suspension, they are filing GSTR-3B, and same cannot be taken in lieu of GSTR-3 - Whether in a case such as present, where credit is due to an assessee, payment by way of adjustment can still be termed “belated” or “delayed.” – Held, effect of order of stay in a pending appeal before Apex Court does not amount to any declaration of law but is only binding upon parties to said proceedings and at same time, such interim order does not destroy binding effect of judgment of High Court as a precedent because while granting interim order, Apex Court had no occasion to lay down any proposition of law inconsistent with one declared by High Court which is impugned - Respondents 2 to 7/appropriate authority, is directed to calculate interest on net cash tax liability i.e. the portion of tax that has been paid by debiting electronic cash ledger or is payable through cash ledger, as per administrative instructions dated, for financial years during which period there was delayed payment of GST, and refund same collected from petitioner, within a period of four weeks from date of receipt of a copy of this order - Writ petition is accordingly allowed.
ORDER :
1. Petitioner is M/s Bharati Airtel Limited, and as per the averments made in the affidavit filed in support of the writ petition, it is engaged in providing telecom services throughout India, including the State of Telangana. The petitioner-company is registered under Central Goods and Services Tax Act, 2017 (for short ‘the Act’).
2. The Deputy Commissioner-EIU, State Tax, vide notice bearing No. DC-2/EIU/ AIRTEL/01/2019 dated 18.03.2019 informed the petitioner-company that it committed some errors in depositing State Goods and Service Tax (SGST) in the State of Telangana for the financial years 2017-18, 2018-19 and 2019-20.
3. The case of the petitioner is that they have entered incorrect State Code in some of the invoices, due to which excess SGST has been paid in the State of Andhra Pradesh. However, on receipt of the notice dated 18.03.2019, the petitioner paid the tax.
4. Thereafter, the petitioner was directed to pay an amount of Rs. 1,80,00,000/- (Rupees one crore, eighty lakhs only) towards interest for the late payment of the SGST to the State Government. Petitioner-company paid the said amount of Rs. 1,80,00,000/- (Rupees one crore, eighty lakhs only) under protest through Form GST PMT-06 bearing CPIN No. 19063600157378 dated 25.06.2019. The said payment of penal interest was intimated to the Deputy Commissioner-EIU vide letter dated 25.06.2019.
5. The case of the petitioner-company is that the above said amount of Rs. 1,80,00,000/- has not been passed over to any other person.
6. Petitioner filed an application dated 12.08.2019 for the period June 2019-20 under ARN No. AA3608190092823, seeking refund of Rs. 1,80,00,000/-(Rupees one crore, eighty lakhs only) under Rule 89 of Central Goods and Services Tax Rules, Rules, 2017 (for short ‘the Rules’) read with Section 54 of the Act.
7. The 4th respondent-Assistant Commissioner of Central Tax, issued a show cause notice dated 13.09.2019 asking the petitioner to explain why its refund application shall not be rejected.
8. Petitioner field reply, contending that the return that is required to be filed under Section 39 of the Act, read with Rule 61 of the Rules, is GSTR-3, but as the same was kept under suspension, they are filing GSTR-3B, and the same cannot be taken in lieu of GSTR-3, and since the GSTR-3 is kept under suspension, the period for which interest can be levied cannot be said to have commenced in terms of Section 50 of the CGST Act, 2017. The petitioner further submitted that even if there is a delay in payment of tax, it is liable to pay interest only on the net tax liability after adjusting the admissible input tax credit.
9. The original authority i.e. the 4th respondent-Assistant Commissioner of Central Tax, Begumpet GST Division, Secunderabad GST Commissionerate, vide Order-in-Original No. 148/2019-20-GSTREFUND, dated 18.10.2019, rejected the claim of the petitioner and held that the petitioner-assess is not eligible for a refund.
10. Assailing the order passed by the original authority, petitioner filed an appeal, and the appellate authority-2nd respondent, vide Order-In-Appeal No. HYD-GST-SC-AP-2-027- 20-21 dated 10.08.2020, dismissed the appeal, confirming the order of the original authority dated 18.10.2019. Aggrieved by the same, the present writ petition has been filed by the petitioner-assessee.
11. Learned counsel for the petitioner Mr. Avinash Desai, referring to the averments made in the affidavit filed in support of the writ petition, submits that due to entering of incorrect State Code in some invoices, excess SGST was paid to the State of Andhra Pradesh instead of State of Telangana, but however, after receipt of notice dated 18.03.2019, petitioner paid the tax for the financial years 2017-18 to 2019-20 and as per the directions of respondent No. 4, it paid an amount of Rs. 1,80,00,000/- (Rupees one crore, eighty lakhs only) towards interest for the delayed payment.
12. That Section 50(1) of the Act provides for payment of interest by a person
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 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.
The liability of interest under Section 50 of the JGST Act cannot be raised without initiating adjudication proceedings under Section 73 or 74 if the taxpayer disputes the liability of interest.
Interest on delayed refunds under the CGST Act is automatic and obligatory, reinforcing the beneficial nature of the legislation.
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.
The court ruled that system delays in transitioning Input Tax Credit should not prevent a taxpayer from obtaining a refund, emphasizing the need for operational efficiency in tax administration.
Taxpayers must be granted an opportunity to rectify bona-fide clerical errors in tax filings. Furthermore, remedial legislative amendments that extend deadlines for claiming input tax credit are appl....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
