No Interest Liability If Assessee Deposited GST Amount Within Due Date But Filed Returns Belatedly | HC

Case Details: Eicher Motors Ltd. v. Superintendent of GST and Central Excise, Range-II - [2024] 158 taxmann.com 593 (Madras)

Judiciary and Counsel Details

• • Krishnan Ramasamy, J.
  • Vijay Narayan & Raghavan Ramabadran for the Petitioner.
  • A.P. Srinivas & K.S. Ramaswamy for the Respondent.

Facts of the Case

In the instant case, the petitioner was not able to file the monthly return in Form GSTR 3B within the prescribed time limit since the amount of transitional credit did not reflect in Electronic Credit Ledger. However, the petitioner had deposited the tax amounts in the Electronic Cash Ledger (ECL) within the due dates, discharging the GST liability for the period from July 2017 to December 2017. Subsequently, the department demanded the payment of interest for the alleged belated payment of GST. It filed writ petition and challenged the demand.

High Court Held

The High Court observed that the GST amount was routinely deposited into the ECL within the due date by the petitioner. The Court further noted that once the amount is paid by generating GST PMT-06, the said amount would be initially credited to the account of the Government immediately upon deposit, at which point, the tax liability of a registered person would be discharged to the extent of the deposit made to the Government.

Thereafter, for the purpose of accounting only, it would be deemed to be credited to ECL as stated in Explanation (a) to section 49(11) of the CGST Act. Thus, the Court held that the petitioner would not be liable to pay interest on GST amount which was routinely deposited into ECL within due date and the writ petition was allowed.

List of Cases Reviewed

• • CIT v. Modipon Ltd. 2017 (356 ELT 481 (SC) (para 68)
  • Vishnu Aroma Pouching Pvt. Ltd. v. Union of India reported in 2020 (38) G.S.T.L. 289 (Guj.) (para 72), followed.
  • RSB Transmission (India) Ltd. v. Union of India MANU/JH/ (para 70)
  • Megha Engineering and Infrastructures Limited v. CCT MANU/TL/41/2019 (para 70), distinguished.