Case title | Pittappillil Agencies Vs Superintendent of Central Tax & Central Excise Goods & Services Tax |
Court | Kerala High Court |
Honorable Judges | Justice C.K.Abdul Rehim Justice Amit Rawal |
Citation | 2019 (11) GSTPanacea 35 HC kerala W.A. NO. 2359 OF 2019 W.P. (C) NO. 31184 OF 2019 |
Judgement date | 21-11-2019 |
Writ Appeal No. 2359/2019 was filed against an interim order issued by a Single Judge on November 19, 2019, in Writ Petition (Civil) No. 31184/2019. After a thorough hearing, it was deemed that the writ petition itself could be resolved based on the arguments presented. Consequently, Writ Petition (Civil) No. 31184/2019 was combined with the writ appeal, and both cases were concluded with this joint judgment.
The main issue revolved around the validity of proceedings initiated for the recovery of interest under Section 50 of the Central Goods and Services Tax Act, 2017 (CGST Act), along with the accompanying garnishee proceedings under Section 79(1)(c) of the same Act.
An Exhibit P16 notice was served to the appellant/petitioner, demanding a payment of Rs. 1,95,01,865.57 as interest due in connection with 14… [the text ends abruptly here.
W.A. No.2359/2019 challenges an interim order from a Single Judge dated November 19, 2019, in W.P.(C) No.31184/2019. The court decided to address the writ petition itself during the proceedings and disposed of both cases together. The main issue concerns the validity of proceedings initiated for recovering interest under Section 50 of the Central Goods and Services Tax Act, 2017 (CGST Act), and related garnishee proceedings under Section 79(1)(c) of the same Act.
The appellant/petitioner received a notice (Exhibit P16) demanding payment of Rs.1,95,01,865.57 as interest due for late filing of 14 returns. They responded with detailed objections (Exhibit P18 and P19), arguing that they were entitled to substantial refunds based on their input tax credit claims exceeding their output tax liability. They highlighted amendments regarding the procedure for granting IGST credit against SGST output and contended that interest liability under Section 50 should only arise if tax payments are overdue after considering input tax credits. They argued that failure to consider input tax credits would undermine the purpose of the Goods and Services Tax law and create financial burdens for dealers due to cascading effects.
The case, W.A. No.2359/2019, arises from an interim order by a Single Judge dated 19th November 2019 in W.P.(C) No.31184/2019. After extensive hearings, it was deemed that the writ petition itself could be resolved based on the arguments presented. Consequently, both cases were disposed of through a common judgment.
The issue at hand concerns the validity of proceedings initiated for the recovery of interest under Section 50 of the Central Goods and Services Tax Act, 2017 (CGST Act), and the subsequent garnishee proceedings initiated under Section 79(1)(c) of the same Act.
The appellant/petitioner received Exhibit P16 notice demanding a significant sum towards interest due for late filing of 14 returns. The petitioner submitted detailed objections (Ext.P18 and Ext.P19) arguing that they were entitled to refunds due to excess input tax credit claimed. They contended that failure to consider this credit would unfairly burden them and defeat the purpose of the GST law.
The petitioner also highlighted recent amendments to Section 50 of the Act, emphasizing that interest should only be levied on the portion of tax paid from the electronic cash ledger after the due date for filing returns, except in cases where proceedings under Section 73 or Section 74 have commenced.
Despite objections, the 3rd respondent issued Ext.P20 notice to the 4th respondent (Bank), instructing them to pay the alleged outstanding amount from the petitioner’s account to the public exchequer, as per Section 79(1)(c)(i) of the Act. This notice was challenged in the writ petition.
A Single Judge’s interim order stayed the operation of Ext.P20 garnishee notice, contingent on the petitioner paying 40% of the demanded amount within one month. The writ appeal was filed in response to this order.
The case, W.A. No.2359/2019, concerns an appeal against an interim order dated November 19, 2019, issued by a Single Judge in W.P.(C) No.31184/2019. The appeal and the writ petition were merged for a common judgment. The core issue revolves around the validity of proceedings initiated for recovering interest under Section 50 of the Central Goods and Services Tax Act, 2017 (CGST Act), along with garnishee proceedings under Section 79 (1) (c) of the same Act.
The appellant/petitioner contested a notice (Exhibit P16) demanding payment of Rs.1,95,01,865.57 in interest for filing 14 returns after due dates. They argued that their input tax credit exceeded their output, entitling them to refunds. They highlighted amendments to Section 50 and contended that interest accrues only if tax payment is delayed after considering input tax credit. They objected to Ext.P20 notice, directing a bank to pay the alleged amount, issued without considering their objections.
The Single Judge’s interim order stayed the operation of Ext.P20 notice, subject to the petitioner paying 40% of the demand within a month, leading to the appeal. The appellate court found no legal grounds to interfere but considered the petitioner’s argument that Ext.P20 was issued without addressing objections against Ext.P16. While agreeing that interest accrues automatically if tax remains unpaid as per the return, the court invoked the principle of audi alteram partem, requiring consideration of the petitioner’s objections before coercive action.
The respondents argued that not restraining the petitioner’s bank account operation could harm public funds pending consideration.
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