Mohammed Irfan Ahmad vs. Union Of INDIA
Held
The Court disposed of the writ petition by granting the petitioner liberty to file a detailed representation before the Superintendent, GST & Central Excise, Rourkela-1 Range, within three weeks. The Court directed that if such a representation is filed, it must be disposed of by passing a reasoned order in accordance with the law and the decision of the GST Council quoted by the petitioner. Until a decision is taken on the representation, no coercive action shall be taken against the petitioner. The Court did not decide the substantive issue of interest liability but provided a procedural remedy.
Facts
The petitioner filed a writ petition challenging a letter dated 12.11.2020 issued by the Superintendent, GST & Central Excise, Rourkela-1 Range. The letter demanded payment of interest under Section 50(1) of the CGST Act, 2017. The petitioner argued that the demand for interest was misconceived based on a decision of the 39th GST Council Meeting held on 14th March 2020. This decision stipulated that interest should be charged only on the net cash liability (Gross Liability minus Input Tax Credit) and not on the gross amount. The petitioner also referred to a previous writ petition, W.P.(C) No.9412 of 2020, which was disposed of by the Court on 17.03.2020, and requested similar disposal for the present petition.
Key Issues
1. Whether the demand for interest on the gross liability under Section 50(1) of the CGST Act, 2017, is legally sustainable in light of the 39th GST Council Meeting decision? Petitioner's Arguments: - The petitioner contended that the impugned letter demanding interest on the gross liability is misconceived. They relied on the decision of the 39th GST Council Meeting, which resolved that interest should be charged only on the net cash liability (Gross Liability minus Input Tax Credit), with this amendment being retrospective from 01.07.2017. The petitioner argued that the department had previously issued numerous notices demanding interest on the gross amount, involving significant sums, and this controversy has now been settled by the Council's decision. Revenue's Arguments: - The judgment does not record any specific arguments made by the revenue or the State.
Sections Cited
Section 50(1)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Heard learned counsel for the petitioner by Video Conferencing mode.
The petitioner by way of this writ petition has challenged the letter dated 12.11.2020 (Annexure-1) issued by opposite party no.5-Superintendent, GST & Central Excise, Rourkela-1 Range, Roukela regarding interest liability under Section 50(1) of CGST Act, 2017. 3. Learned counsel for the petitioner submits that the direction in the last paragraph of the impugned letter for payment of interest is misconceived inasmuch as in 39th GST Council Meeting Decisions taken on 14th March, 2020, it has been decided thus:-
Related to Interest Liability:- Interest to be charged on Net Cash Liability (retrospective amendment from 01.07.2017) Earlier the department had issued Lacs of Notices involving the Penal Interest running in thousands of crores demanding interest on Gross Amount. Now, this controversy is settled & the interest would be applicable in case of only Net Cash Lia
The judgment continues below.
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