LEXUS MOTORS LTD. AND ANR. VERSUS JOINT COMMISSIONER OF STATE TAX, GOVERNMENT OF WEST BENGAL AND ORS.

Delay in filing monthly return – Input Tax Credit – GST Act – HELD THAT:- Hearing is interrupted since computation sheet of interest issued to petitioner has not been disclosed. Petitioner has leave to file supplementary affidavit, which will be accepted on adjourned date on advance copy served.

List on 26th September, 2019 at 3 p.m.

No.- W. P. 13253 (W) of 2019

Dated.- September 20, 2019

Mr Arindam Sinha, J.

For The Petitioners : Mr. J. P. Khaitan, Sr.Adv., Mr. Agnibesh Sengupta And Mr. Avishek Guha

For The State-Respondents : Mr. Abhratosh Majumdar, Ld. A.A.G., Mr. Prithu Dudhoria And Mr. Avra Majumdar

For The Union of India : Mr. Sujit Mitra

ORDER

Petitioner by this writ petition seeks, inter alia, declaration, it is entitled to avail Input Tax Credit (ITC) under GST Act before due date of monthly return and is not required to pay any interest under section 50, with reference to such input tax, for any delay in filing monthly return and has impugned order dated 6th June, 2019 demanding payment of interest at ₹ 1,52,94,475/-

Mr. Khaitan, learned senior advocate appears on behalf of petitioner and submits, ITC of petitioner is credit available to it on tax already paid. There cannot be interest charged thereon. He refers to sub-sections (1) and (2) of section 50 in Central Goods and Services Tax Act, 2017 to submit without prejudice, even if there is interest to be paid thereon, prescription for calculation of it has not yet been provided. He refers to Agenda for 31st GST Council Meeting (22nd December 2018), in particular item 7(xx), to paragraph 3 thereunder. He also refers paragraphs 4 and 6.

Two sentences from paragraph 3 are extracted and reproduced below :

Thus, although the law permits part payment of tax but no such facility has been yet made available on the common portal. This being the case, a registered person cannot even avail his eligible ITC as he cannot furnish his return unless he is in a position to deposit his entire tax liability as self-assessed by him. This inflexibility of the system increases the interest burden. The same is illustrated as below:

…………………………………………..

……………………………………………”

He hands up extract from Finance (No.2) Act, 2019. He relies on clause (b) under sub-section (2) of section 1 and proviso to section 100, to cause amendment of section 50 (on notification). He prays for interim order pending adjudication.

Mr. Majumdar, learned senior advocate, Additional Advocate General draws attention to impugned order dated 6th June, 2019. Two paragraphs from the order are reproduced below :

The RTP is liable to pay interest as per the provision of section 50(1) of the WBGST Act, 2017. It is seen from subsection (1) of section 50 that the liability to pay interest arises automatically, when a person who is liable to pay tax, fails to pay the tax to the Government within the period prescribed. In fact, the liability to pay interest under section 50(1) arises even without any assessment, as the person is required to pay such interest “on his own”. Therefore, it is clear that the liability to pay interest under section 50(1) is self-imposed and also automatic, without any determination by any one.

However, a computation sheet of Interest under section 50(1) has already been sent to the RTP through e-mail on 27/09/2018 and issued reminder on 29/05/2019 & 03/06/2019 but the RTP has failed to make payment till date.”

He submits, the liability to pay interest is automatic and is to be self-imposed. The notice was issued in exercise of power under provisions in sub-section (3) of Section 79.

Hearing is interrupted since computation sheet of interest issued to petitioner has not been disclosed. Petitioner has leave to file supplementary affidavit, which will be accepted on adjourned date on advance copy served.

List on 26th September, 2019 at 3 p.m.

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