Interest Liability Arises Automatically on Delayed Filing of Returns Even if Payment Made From Credit Ledger | Patna HC
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Case Details: Sincon Infrastructure (P.) Ltd. v. Union of India - [2024] 161 taxmann.com 616 (Patna)
Judiciary and Counsel Details
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- K. Vinod Chandran, CJ. & Harish Kumar, J.
- Gautam Kumar Kejriwal, Atal Bihari Pandey, Alok Kumar Jha, Mukund Kumar, Akash Kumar, Aditya Raman & Ranjeet Kumar, Advs. for the Petitioner.
- Dr Krishna Nandan Singh, ASG, Anshuman Singh, Sr. SC, CGST and CX, Devansh Shankar Singh, JC to ASG & Shivaditya Dhari Sinha, JC to ASG for the Respondent.
Facts of the Case
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.
High Court Held
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.
List of Cases Reviewed
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- Refex Industries Ltd. v. Assistant Commissioner of CGST & Central Excise in W.P. Nos. 23360 and 23361 of 2019 (Para 28) followed.
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