Mohammad Faruk Hossain vs. Joint Commssioner Of State Tax , Maldah Charge And Ors
Held
The Court held that the impugned demand notice dated February 17, 2020, was 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. This amendment, which clarifies the calculation of interest on delayed tax payments, was deemed to have been substituted retrospectively from July 1, 2017. The Court found that the authorities had failed to consider this amended legal position when issuing the demand notice. Consequently, the demand notice was set aside. However, the Court clarified that setting aside the notice would not prevent the respondents from recalculating the demand after taking into consideration the aforesaid amendment of Section 50(1) of the GST Act. The ratio decidendi is that any demand for interest under Section 50(1) must adhere to the amended provisions, even if the original demand was raised prior to the amendment, given its retrospective effect.
Facts
The petitioner, Mohammad Faruk Hossain, challenged a demand notice dated February 17, 2020, issued by the Joint Commissioner of State Tax, Maldah Charge. The demand notice pertained to interest on tax. The petitioner contended that the adjudication proceeding and the subsequent confirmation by the appellate authority failed to consider the amendment to Section 50(1) of the GST Act, introduced by the Finance Act, 2021. This amendment, deemed effective from July 1, 2017, altered the basis for calculating interest on delayed tax payments. The petitioner argued that the impugned notice was unsustainable in light of this amended legal position.
Key Issues
1. Whether the demand notice for interest, issued prior to the amendment of Section 50(1) of the GST Act by the Finance Act, 2021, is sustainable in law, considering the retrospective effect of the amendment from July 1, 2017? (Question of law) Petitioner's Contentions: The petitioner argued that the demand notice was not sustainable as it did not take into account the amended Section 50(1) of the GST Act. The amendment, which clarifies that interest is payable only on the portion of tax paid by debiting the electronic cash ledger, was deemed to have been substituted with effect from July 1, 2017. Therefore, any demand for interest should be calculated based on this amended provision. Revenue's Contentions: The judgment does not record any specific arguments made by the revenue or respondent authorities.
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. T. M. Siddiqui, Mr. D. Ghosh. …….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 period f
The judgment continues below.
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