Bell Granito Ceramica Ltd VS The Union of India

The document outlines a legal proceeding involving a writ applicant and a government department regarding the imposition of interest on belated tax payments under the Central Goods and Services Tax (CGST) Act. Here’s a detailed summary:

1. Amendment Allowed: The court permits an amendment to the proceedings and directs it to be executed promptly.

2. Notice Issued: The court orders a notice to be sent to the respondents, with a return date set for March 11, 2020.

3. Interim Relief Granted: After considering arguments from both sides and reviewing the available evidence, the court decides that the writ applicant is entitled to interim relief. The applicant seeks a stay on the implementation of a garnishment notice issued on February 3, 2020, until the final resolution of the case.

4. Disputed Liability Amount: There’s a significant discrepancy in the perceived liability amount between the Department and the writ applicant. The Department claims the applicant owes Rs. 1,01,78,188 in interest, while the applicant argues that their liability should be capped at Rs. 54,77,778.

5. Key Legal Issue: The crux of the legal dispute revolves around the interpretation of Section 50 of the CGST Act concerning the automatic imposition of interest on late tax payments. Additionally, there’s a question about whether this interest should be calculated based on gross tax liability or net tax liability after adjusting input tax credits.

The case at hand involves a writ applicant seeking interim relief regarding a garnishee notice issued against them. The court, after considering arguments from both sides, acknowledges the need for interim relief and decides to stay the implementation of the garnishee notice until further proceedings. The Department claims a substantial liability from the applicant, while the applicant contests this, arguing for a lower amount. The central legal question pertains to the automatic imposition of interest on belated tax payments under Section 50 of the CGST Act and whether such liability should be based on gross tax or net tax after adjusting input tax liability.

In response to the court’s direction, the applicant agrees to deposit a portion of the claimed amount within a week and the rest in monthly installments. Additionally, the applicant undertakes to file a sworn statement confirming this arrangement.

The court grants interim relief based on the applicant’s submission and schedules further hearings alongside a related civil application.

Following the court’s order, the applicant submits an undertaking, confirming their identity and providing their address, and affirming their challenge against the bank attachment garnishee notices dated January 17, 2020, under Section 79 of the applicable law.

The court proceedings outlined in the document involve a writ applicant challenging bank attachment garnishee notices and a demand for interest on gross tax liability under the Central/Gujarat Goods and Services Tax Act, 2017. The court has granted interim relief to the writ applicant, pending the final disposal of the case, subject to certain conditions, including the deposit of a specified amount within a specified timeframe.

The writ applicant, Mr. Viren Rathod, has filed an undertaking before the court agreeing to comply with the conditions set forth in the interim order. This includes depositing a portion of the amount within one week and the remaining balance in four monthly installments. However, it is noted that the writ applicant has failed to adhere to the undertaking due to difficulties faced during a lockdown period.

The matter raises questions about the determination of interest on belated tax payments under Section 50 of the CGST Act, particularly regarding whether such interest is automatic or should be determined after an explanation from the assessee. Additionally, there is a dispute over whether the liability should be based on gross tax liability or net tax liability after adjusting input tax.

The court has allowed for an amendment to be made in the proceedings and has issued a notice to the respondents returnable on a specified date. After hearing arguments from both sides, the court is of the view that the writ applicant is entitled to some interim relief. The applicant’s counsel has proposed a payment plan, which the court has accepted, and the applicant has filed an undertaking to comply with this plan.

Overall, the document outlines legal proceedings related to tax liabilities and interim relief granted by the court, as well as the applicant’s commitment to fulfilling the conditions of the relief.     

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For Reference Visit
Gujarat High Court 

Read Another Case Law:
GST Case Law