Rajesh Shaw vs. Suptd ,CGST And Cx Shyambazar And Ors
Held
The Court held that the impugned demand notice dated March 2, 2020, relating to interest under Section 50(1) of the GST Act, is not sustainable in law in view of the amendment made by Section 112 of the Finance Act, 2021. The Court noted that the amendment, which is deemed to have been substituted with effect from July 1, 2017, provides a specific mechanism for calculating interest on delayed tax payments. The proviso clarifies that interest is payable on the portion of tax paid by debiting the electronic cash ledger, subject to certain conditions regarding the furnishing of returns and the commencement of proceedings. The Court reasoned that the amended legal position directly impacts the validity of the demand notice. Consequently, the impugned demand notice was set aside. However, the Court also directed that setting aside the notice would not prevent the respondent from recalculating the demand after taking into consideration the aforesaid amendment of Section 50(1) of the GST Act.
Facts
The petitioner, Rajesh Shaw, challenged a demand notice dated March 2, 2020, issued by the Superintendent, CGST & CX, Shyambazar Division, for interest under Section 50(1) of the GST Act for the assessment years 2017-18 and 2018-19. The writ petition was filed on July 19, 2019. During the pendency of the writ petition, Section 50(1) of the GST Act was amended by Section 112 of the Finance Act, 2021, with effect from July 1, 2017. The amendment introduced a proviso concerning the calculation of interest on delayed tax payments.
Key Issues
1. Whether the impugned demand notice dated March 2, 2020, for interest under Section 50(1) of the GST Act, relating to assessment years 2017-18 and 2018-19, is sustainable in law, considering the subsequent amendment to Section 50(1) by the Finance Act, 2021. Petitioner's contention: The petitioner argued that the amendment to Section 50(1) of the GST Act, which is deemed to have been substituted with effect from July 1, 2017, renders the impugned demand notice unsustainable. The amended provision clarifies that interest is payable only on the portion of tax paid by debiting the electronic cash ledger, provided the return is furnished after the due date but before the commencement of proceedings under Section 73 or 74. Revenue's contention: The judgment records no specific argument from the respondents.
Sections Cited
Section 50, Section 73, Section 74, Section 112
AI-generated summary — verify with the full judgment below
2021 p.b. Sl. No.137. W.P.A. 11244 of 2020 Rajesh Shaw Vs. Superintendent, CGST & CX, Shyambazar Division & Ors. (Via Video Conference) Mr. Suryaneel Das, Mr. Suvranil Saha. …….for the petitioner. Mr. Sukalpa Seal. …….for the respondents. Both the parties are present. In this matter, the petitioner has challenged the impugned demand notice dated 2nd March, 2020 in connection with interest under Section 50 Sub-Section (1) of the GST Act relating to the Assessment Year 2017-18 and 2018-19 and this writ petition was filed on 19th July, 2019. The petitioner submits that during the pendency of this writ petition, Section 50 Sub-Section (1) of the GST Act has been amended by the Finance Act, 2021 under Section 112 of the Finance Act which is quoted hereunder:- “112. In Section 50 of the Central Goods and Services Tax Act, in sub-section (1), for the proviso, the following proviso shall be substituted and shall be deemed
2 to have been substituted with effect from the 1st day of July, 2017, namely:- Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said peri
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.