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Interest liability arises automatically on delayed filing of returns even if payment made from credit ledger: Patna HC
The petitioner received a notice for the recovery of interest on the belated payment of tax. The interest was charged for the tax paid from the Electronic Credit Ledger (ECL) for the financial year 2018-19 and order was passed. Aggrieved by the order, the petitioner filed a writ petition to the High Court of Patna.
The High Court noted that the payment of tax and furnishing of return have to occur simultaneously. The Court further noted that the input tax credit and the resultant payment of tax from the Electronic Credit Ledger occurs only when a return is furnished. If there is a delay in furnishing of returns then obviously there is a delay in the input tax credit coming into the Electronic Credit Ledger and a resultant payment being made to the Government as tax, interest, penalty or other amounts due under the Act.
Therefore, the claim of the petitioner that the proviso of Section 50(1) mandates a levy of interest only when there is a delayed furnishing of return and debit made and payment effected from the Electronic Cash Ledger was rejected. The Court also held that interest shall be payable on the delay occasioned in the payment of tax and as per section 50(1) interest liability would arise automatically on delayed filing of returns, irrespective of whether payment is made from Electronic Credit Ledger or Electronic Cash Ledger.
Order to be set aside and matter to be remanded as no reasons were specified for denying ITC: HC
The petitioner is engaged in the manufacture and supply of tubes and pipes of iron and steel. The department issued SCN and the petitioner replied to the same. Thereafter, the order was passed by the department. It filed writ petition to challenge the order and contended that the order was passed without recording proper reasons.
The Honorable High Court noted that the petitioner had placed on record sample invoices and also bifurcated amounts paid towards freight for the Hosur unit, which is the relevant unit and enclosed both a reconciliation statement and a statement from the Chartered Accountant in respect of such bifurcation. However, the department recorded that the petitioner had not filed any documents or evidence with regard to payment of GST on the collected freight charges.
The Court also noted that the department had not given proper reasons for rejecting the credit. Therefore, it was clear that the conclusion of department was not justified in light of the evidence placed on record by the petitioner. Thus, the Court held that the impugned order was liable to be set aside and the matter was remanded for re-consideration.
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General Manager - Indirect Taxation UPL Ltd (Formerly Known as United Phosphorus Limited)
10 个月Very helpful!