SC dismissed SLP against HC order to not levy interest on delayed tax payment due to technical glitch on GST Portal

Case details: Union of India v. Vishnu Aroma Pouching (P.) Ltd. - [2021] 129 taxmann.com 17 (SC)

Judiciary and Counsel Details

• • Sanjay Kishan Kaul and Krishna Murari, JJ.
  • N. Venkataraman, Ld. ASG, S.K. Singhania, V.V.V. Patabhai Ram, Akshay Amirtanshu, Prupesh Kumar, Advs. and Mukesh Kumar Maroria, AOR for the Petitioner.
  • Mukul Rohatgi, Sr. Adv., Nalin Talwar, Sameer Abhyankar, AOR, Amish Tandon, Ayush Beotra, Dipin Tamang and Uddhav Khanna, Advs. for the Respondent.

Facts of the Case

The petitioner discharged its total tax liability, partly by paying tax in cash and partly by paying tax through legally availed Input Tax Credit (ITC) while filing return for the period August, 2017. Thereafter, petitioner proposed to furnish GSTR-3B which system accepted, however, though payment of tax liability had been fully made by petitioner, due to system crash, information and details in all columns of this return were shown as zero. The, petitioner immediately informed GST Authorities, however, authorities maintained silence for a considerable period of time and did not provide remedial measures.

However, the liability was declared in GSTR 3B return filed for September 2019 but the petitioner received notice from department that they were liable to make payment of interest for the period between actual date of filing of return and date of filing of return of September, 2019. The petitioner submitted that he had discharged his tax liability by depositing requisite funds in Cash ledger within time, however, it was because of technical glitch same could not be credited to Government account, and therefore he would not be liable for interest. The High Court held that petitioner having duly discharged tax liability of August, 2017 within period prescribed and declaration was submitted by petitioner along with return of September, 2019 shall be treated as petitioner having discharged its tax liability of August, 2017 within period stipulated under GST laws and petitioner shall not be liable to pay any interest on such tax amount.

The department filed Special Leave Petition against the order. The Honorable Apex Court observed that decision of High Court was passed on November 14, 2019 and the proposal for filing the Special Leave Petition was sent after almost six months on May 20, 2020 and it took another three months to decide whether to file Special Leave Petition or not on August 25, 2020. Such kind of lethargy on part of the revenue department with so much computerization having been achieved is no more acceptable. Therefore, this petition was to be dismissed as time barred.

Case Review

• • Vishnu Aroma Pouching (P.) Ltd. v. UOI [2021] 129 taxmann.com 16 (para 6) SLP dismissed. [See Annex]

List of Cases Referred to

• • State of Madhya Pradesh v. Bheru Lal [SLP(C). Diary No. 9217 of 2020, dated 15-10-2020] (para 3)
  • State ofOdisha v. Sunanda Mahakuda [SLP (Civil). Diary No. 22605 of 2020, dated 11-12021] (para 3)
  • Office of theChief Post Master General v.Living Media India Ltd.  [2012] 20 taxmann.com 347/207 Taxman 163/348 ITR 7 (SC) (para 3).