The Assistant Commissioner Of CGST VS Daejung Moparts Pvt Ltd

The writ appeals in question have been referred to the current judge following an order issued by the Hon’ble Chief Justice. This referral is based on specific facts and circumstances that necessitated such a decision.

1. Background of the Case: The writ appeals arise from legal proceedings that have traversed multiple stages within the judicial system. Initially, the matter was handled by lower courts or tribunals where decisions were made that prompted the appellants to seek further judicial review.

2. Order by the Hon’ble Chief Justice: The Hon’ble Chief Justice, recognizing the complexity or significance of the issues involved, decided to refer the writ appeals to a specific judge for detailed examination and resolution. This step underscores the importance and possibly the contentious nature of the appeals.

3. Nature of Appeals: The appeals likely involve intricate questions of law, significant public interest, or substantial issues pertaining to constitutional or administrative law. The specifics of these questions or issues have warranted special attention and a thorough judicial review.

4. Jurisdiction and Procedural Posture: The referral indicates that the current judge has been deemed competent to address the legal intricacies and render a decision that aligns with judicial precedents and legal principles. The procedural posture involves a reassessment of the lower courts’ or tribunals’ decisions, with a focus on legal correctness and adherence to due process.

5. Anticipated Judicial Examination: The judge will likely conduct a comprehensive review of the case records, hear arguments from both parties, and consider relevant legal precedents. The objective is to ensure a fair and just outcome that respects the rights of the parties involved while maintaining the integrity of the legal system.

6.Potential Outcomes: The judge may uphold the decisions of the lower courts or tribunals, overturn them, or remand the case for further proceedings. The decision will be based on legal merits, factual accuracy, and procedural fairness.

7. Implications: The outcome of these writ appeals could have broader implications beyond the immediate parties involved. It may set a legal precedent, influence future judicial decisions, or prompt legislative or administrative changes.

In conclusion, the referral of these writ appeals by the Hon’ble Chief Justice underscores the significant legal and factual complexities involved. The assigned judge is expected to undertake a meticulous review to deliver a judicious resolution that upholds the principles of justice and legal integrity.

These writ appeals came before me through a reference ordered by the Hon’ble Chief Justice, under specific circumstances. The central issue involves bank attachment proceedings initiated under the CGST Act against the respondents for unpaid tax dues.

In W.A. No. 2127 of 2019, the respondent (original writ petitioner in W.P. No. 15978 of 2019) challenged a notice dated May 21, 2019, issued in Form GST DRC-13 under Section 79(1)(c) of the CGST Act. This notice was directed to the Indian Overseas Bank in Maraimalai Nagar, instructing the bank to remit a sum of Rs. 41,74,617/- to the Government under CGST and SGST, split equally, from the account maintained by the writ petitioner. Essentially, this was a bank attachment order.

Similarly, in W.A. No. 2151 of 2019, the respondent (original writ petitioner in W.P. No. 15624 of 2019) challenged a similar notice issued under Section 79(1)(c) of the CGST Act to the Indian Overseas Bank in Sriperumbudur. This notice demanded the bank to pay Rs. 1,00,91,755/- to the Government under CGST and SGST, divided equally, from the petitioner’s account, amounting to another bank attachment proceeding.

In the case of the writ petitioner in W.P. No. 15978 of 2019, the petitioner argued that after the introduction of GST in July 2017, three types of returns were required: GSTR-1 (outward supplies), GSTR-2 (inward supplies), and GSTR-3 (total purchases and sales, tax payable, and input tax credit). Additionally, GSTR-3B, a monthly return, required the assessee to remit the tax after deducting input tax credit (ITC). The petitioner explained that due to market recession and delayed payments from purchasers, they were unable to file the monthly returns for July 2017 to March 2018 on time, thus failing to remit dues along with the returns. However, upon receiving payments from purchasers, the petitioner subsequently filed the returns and paid the taxes after crediting the ITC.

The petitioner also highlighted that for July and September 2017, there were no delays in filing returns or paying tax dues. Despite this, the Superintendent of Central Excise, Chengalpattu Range, demanded Rs. 41,74,620/- as interest for the delayed tax payment for July 2017 to March 2018 through a communication dated May 2, 2019. The petitioner, in response on May 10, 2019, contested this amount, stating that the correct interest payable was Rs. 9,15,121/- and provided an annexure detailing the due dates, actual payment dates, days delayed, and interest payable.

Subsequently, an attachment order was issued against the petitioner’s bank account for the purported non-payment of the interest as mentioned in the communication dated May 2, 2019.

In the case of W.P.No.15624 of 2019, the petitioner has outlined their position regarding the issue of input tax credit (ITC) and the subsequent payment of taxes. The petitioner consistently took ITC based on invoices and other legal documents, and they duly filed their GSTR 1 returns monthly, reporting the total value of their supplies each month. Despite having ITC in their ledgers, the petitioner faced difficulties in utilizing this credit for tax payments through GSTR 3B filings unless full payment of tax was made. They contended that the law does not mandate full payment of tax in a single installment.

The problem arose when the first respondent issued a communication on March 14, 2019, instructing the petitioner to pay interest on delayed tax payments for the period from July 2017 to November 2018. The interest was calculated on the entire tax liability instead of just the unpaid portion. The petitioner responded on March 29, 2019, with a detailed worksheet showing their ITC credits and tax liabilities. According to the petitioner, they had sufficient ITC credit each month, covering 73% of their total GST liability of Rs.85,27,87,219/-. This left Rs.229,014,673/- to be paid in cash.

The petitioner argued that since they had ample ITC credit, they adjusted it against the total GST payable and calculated the interest only on the remaining cash component. By their calculations, the interest liability amounted to Rs.22,9,413/-. Despite this, a bank attachment was issued to recover a much larger sum of Rs.10091755, which the petitioner disputes. The case highlights the petitioner’s claim that the interest should be calculated only on the unpaid cash component and not on the entire tax liability, given their substantial ITC credits.

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