Mohammad Faruk Hossain vs. Joint Commissioner Of State Tax , Malda Charge And Ors
Held
The Court held that the impugned demand notice relating to interest is not sustainable in law. The reasoning was based on the amendment to Section 50(1) of the GST Act, introduced by Section 112 of the Finance Act, 2021, which is deemed to have been substituted with effect from July 1, 2017. This amended provision clarifies the calculation of interest on tax payable in respect of supplies declared in returns furnished after the due date. The Court found that the authorities had not considered this crucial legal position. Consequently, the demand notice was set aside. However, the Court clarified that setting aside the notice does not preclude the respondent from recalculating the demand after taking into account the amended Section 50(1) of the GST Act. No specific issue was left undecided.
Facts
The petitioner, Mohammad Faruk Hossain, challenged a demand notice dated February 17, 2020, issued by the Joint Commissioner of State Tax, Maldah Charge. This notice arose from an adjudication proceeding and was subsequently confirmed by the appellate authority. The petitioner contended that the authorities failed to consider the amended Section 50(1) of the GST Act, which was substituted by Section 112 of the Finance Act, 2021, and deemed to have effect from July 1, 2017. The amendment pertains to the calculation of interest on delayed tax payments.
Key Issues
1. Whether the demand notice for interest is sustainable in law, considering the amendment to Section 50(1) of the GST Act made by Section 112 of the Finance Act, 2021, which is deemed to have effect from July 1, 2017? Petitioner's contention: The petitioner argued that the impugned demand notice, which pertains to interest, is not sustainable in law because the authorities failed to take into consideration the amended Section 50(1) of the GST Act. This amendment, effective retrospectively from July 1, 2017, alters the basis for calculating interest on delayed tax payments. The petitioner relied on the amended provision to assert the illegality of the demand. Revenue's contention: The judgment does not record any specific arguments made by the revenue or respondent authorities regarding this issue.
Sections Cited
Section 50(1), Section 112, Section 39, Section 73, Section 74
AI-generated summary — verify with the full judgment below
2021 Tax, Maldah Charge & Ors. (Via Video Conference) Mr. Saurabh Sankar Sengupta, Mr. Indranil Biswas. ……for the petitioner. Mr. Ajay Chaudey. …….for the respondent no.
Mr. Sujit Mitra. ……for the UOI. Mr. A. Ray, Mr. S. Mukherjee, Mr. N. Chatterjee. …….for the State. Heard learned advocates appearing for the parties. In this matter, petitioner has challenged the impugned demand notice dated 17th February, 2020 arising out of the adjudication proceeding which was confirmed by the appellate authority by not taking into consideration Section 50 Sub-Section (1) of the GST Act which has been amended by the Finance Act, 2021 under Section 112 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 perio
The judgment continues below.
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