Vishnu Aroma Pouching Pvt. Ltd. vs Union of India

By this petition under Article 226 of the Constitution of India, the petitioners seek the following substantive reliefs: “In the above premises, the petitioners most respectfully pray as under: (A) That Your Lordships may be pleased to issue a Writ of Mandamus or Writ of Certiorari or any other appropriate writ, direction or order, quashing and setting aside the Respondents’ decision conveyed vide letter F.No.1/22-01/SYSTEMS/2018-19 Part-I dated 7.3.2019 (Annexure-“I”) with all consequential reliefs to the Petitioner including a declaration that the Petitioner’s tax liability of August 2017 stands fully discharged within the period stipulated under the GST Laws; (B) That Your Lordships may be pleased to issue a Writ of Mandamus or any other appropriate writ, direction or order, directing the Respondents herein to order regularization of the Petitioner’s GSTR-3B for August 2017 (Annexure-“B”) by bringing it in line with GSTR-1 furnished by the Petitioner (Annexure-“D”) in respect of information and details including payment of tax due by the Petitioner for August 2017; (C) That Your Lordships may be pleased to issue a Writ of Mandamus or any other appropriate writ, direction or order, directing the Respondents, their servants and agents to make an appropriate entry in the Petitioner’s electronic liability register corresponding to the Unique Identification Number in respect of the discharge of the Petitioner’s tax liability for August 2017.” The first petitioner, Messrs Vishnu Aroma Private Limited (hereinafter referred to as “the petitioner”), is engaged in manufacturing Pan Masala, which is sold under the brand name of “Vimal.” The petitioner has been registered as a manufacturer and supplier of Pan Masala. It is the case of the petitioner that it has been paying liabilities under the Goods and Services Tax Acts and also complying with the procedural formalities laid down under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act”), the Integrated Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”). The Goods and Services Tax Laws have been brought into force with effect from 1.7.2017. All the transactions in the nature of maintenance of records and registers, payment of tax, submission of returns, etc. are electronically maintained under the GST laws, and the transactions regarding payment of tax and submission of returns are undertaken through the common portal created by the Central Government. It is the case of the petitioner that it has been complying with the procedural requirements electronically, in accordance with the statutory provisions. The petitioner contends that despite adhering to the electronic filing and payment requirements, an issue has arisen regarding the tax liability for August 2017. The petitioner asserts that the tax liability for that month was fully discharged within the period stipulated under the GST Laws. However, the respondent’s decision conveyed via letter F.No.1/22-01/SYSTEMS/2018-19 Part-I dated 7.3.2019 disputes this, resulting in the petitioner seeking relief from the court. The petitioner argues that the decision is incorrect and that the tax liability for August 2017 was indeed settled as required. The petitioner seeks a Writ of Mandamus or Certiorari to quash this decision and a declaration that the tax liability for August 2017 is fully discharged. Additionally, the petitioner requests an order for the regularization of their GSTR-3B for August 2017 to align with the GSTR-1 they furnished, ensuring that the information and payment details are accurately reflected. Furthermore, the petitioner seeks a directive for the respondents to make the appropriate entry in the electronic liability register corresponding to the Unique Identification Number, confirming the discharge of the tax liability for August 2017. The petitioner emphasizes that they have consistently complied with the procedural requirements under the GST laws and maintained all necessary electronic records as mandated. They argue that any discrepancy or issue is not due to any fault on their part but rather an error that should be rectified by the respondents. The petitioner’s engagement in the manufacturing and supply of Pan Masala under the brand name “Vimal” and their compliance with the GST laws underscore the importance of accurate and timely electronic transactions. The petitioner asserts that they have fulfilled their obligations and seeks the court’s intervention to ensure that their tax liability is correctly acknowledged and recorded.

For the month of August 2017, the petitioner faced a total tax liability amounting to Rs.128,63,47,508/-. To address this substantial liability, the petitioner adopted a multifaceted approach, disbursing the amount through a combination of cash payments and utilizing Input Tax Credit (ITC). Specifically, the petitioner made substantial cash payments amounting to Rs.87,62,55,084/- and Rs.26,88,56,662/-, which were debited from its account with HDFC Bank. In addition to these cash payments, the petitioner also used Rs.14,12,35,762/- of ITC available in its credit ledger to cover part of the tax liability. The payments were executed through two separate Challans, both dated 19.9.2017, with the first Challan covering Rs.87,62,55,084/- and the second Challan covering Rs.26,88,56,662/-.

The procedural framework for tax payment under the Goods and Services Tax (GST) regime is outlined in Section 49 of the Central Goods and Services Tax (CGST) Act. Sub-section (1) of Section 49 stipulates various modes for depositing tax, including the use of internet banking. Furthermore, Sub-section (7) of Section 49 mandates that all liabilities of a taxable person be recorded and maintained in an Electronic Liability Register, a requirement further detailed in Rule 85(1) of the CGST Rules. Form GST PMT-01 is designated for this purpose and is utilized to maintain such registers on the common portal, which is also applicable to the petitioner.

For cash payments, Rule 87(1) of the CGST Rules requires the maintenance of an electronic cash ledger, which is crucial for recording credits and debits of amounts paid towards tax, interest, and other liabilities. This electronic cash ledger, in accordance with the prescribed format, is maintained on the common portal for the petitioner’s transactions.

When payments are made through internet banking, a Challan Portal Identification Number (CPIN) is generated, which uniquely identifies the payment and is recorded on the challan along with other transaction details. In the petitioner’s case, for the payments made on 19.9.2017, two CPINs were generated: 17092400195007 and 17092400195744. These CPINs correspond to the Challans used for disbursing a cumulative sum of Rs.114.51 crores (rounded off) towards the tax liability for August 2017. This process ensures that the payments are properly recorded and tracked within the GST framework, reflecting the petitioner’s compliance with the tax regulations for the specified period.

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