Demand for Interest on Delayed Payments During Period of GSTIN Cancellation Was Inequitable & Liable to Be Set Aside | HC

Case Details: Hilton Garden INN v. Commissioner of Kerala Goods & Service tax - [2024] 158 taxmann.com 93 (Kerala)

Judiciary and Counsel Details

• • Dinesh Kumar Singh, J.
  • Anil D. Nair, Telma Raju & Aaditya Nair, Advs. for the Petitioner.
  • Sreelal N. Warrier for the Respondent.

Facts of the Case

The petitioner remitted the GST for the month of July, 2017 on 21-8-2017 but on account of technical problem in the GST network, the tax remitted by the petitioner could not get reflected in the cash ledger appearing in the return module and the GSTIN was cancelled without notice.

It filed application for restoration of GSTIN and the same was restored after following interim order by Kerala High court. After restoration, portal remained unavailable so there was further delay in filing of returns and payment of taxes. The department levied demand for interest on delayed tax payment. It filed writ petition against the demand of interest and contended that delay was solely due to technical glitch and unjustifiable cancellation of their GSTIN.

High Court Held

The Honorable High Court noted that the petitioner’s GSTIN was cancelled without notice and it had to approach High Court for restoration of GSTIN. The Court also recognized petitioner’s hardships caused by technical glitch and wrongful cancellation of GSTIN. Therefore, the Court held that the demand for interest on delayed payment was inequitable and liable to be set aside. However, the Court also held that the petitioner would be liable for interest on any delay in remitting tax after 20 days from restoration of GSTIN.