M/S. Balaji Enamil Industry vs. The Assistant Commissioner (St)
Held
The Court held that while the proviso to Section 50 of the CGST Act, as amended, suggests interest is on net tax liability, the specific findings of the Assessing Authority regarding incorrect declaration of output tax liability and utilization of ineligible credit are crucial. Given the availability of an appeal remedy, the Court found it appropriate for the petitioner to pursue that avenue.
Facts
The petitioner sought to declare an interest and penalty order as illegal. The petitioner had reversed unutilized Input Tax Credit (ITC) after an inspection and paid the demanded amount. However, the authorities imposed interest and penalty, stating that interest was payable on tax not paid within the prescribed period.
Key Issues
Whether interest is leviable on unutilized ITC when the tax liability is discharged by reversing such ITC, and whether a writ petition is maintainable when an alternative appellate remedy exists.
Sections Cited
Section 50, Section 122(2), Section 73, Section 107, Section 71
AI-generated summary — verify with the full judgment below
THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HON’BLE SRI JUSTICE TARLADA RAJASEKHAR RAO
Writ Petition No.6934 of 2022
ORDER:- (per the Hon’ble Sri Justice C. Praveen Kumar)
The present writ petition came to be filed, seeking the following relief:- “to declare the impugned interest and penalty order passed by the first respondent in Form DRC-07, dated 18.12.2021, imposing interest under Section 50 along with penalty under Section 122(2) of the Central Goods and Service Tax Act, 2017 [for short, “CGST Act”], for the tax period 2017-18 to 2019-20, as illegal, improper and incorrect.”
The averments made in the affidavit filed in support of the writ petition, are as under:-
(a) The petitioner is a registered dealer, intended with GST and is on the rolls of first respondent doing business in MDF Boards and Writing Slates. The first respondent conducted inspection on the business premises of the petitioner on 04.11.2020 and thereafter issued Show Cause notice dated 06.08.2021, proposing to restrict ITC for the tax period 2019-20 at Rs.9,41,624/- [as against Rs.18,82,220/-]. On receipt of Show Cause notice, the petitioner paid the amount a
The judgment continues below.
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Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.