Devarasan R vs. The Assistant Commissioner (St)

Held

The Court held that the proposal relating to the rejection of input tax credit for belated filing of GSTR-3B returns was dropped in the impugned order, taking into account the extended time limit under Section 16(5) of the GST enactments and relevant circulars. However, the Court found no infirmity in the confirmed proposal concerning the belated payment of taxes on outward supplies for the period from April 2019 to March 2020. The Court reasoned that Circular No.136/06/2020-GST, relied upon by the petitioner, was conditional upon the filing of GSTR-3B returns and payment of taxes by the stipulated due dates. The records indicated that the petitioner did not comply with these conditions. Therefore, the Court concluded that the impugned order was not erroneous and did not warrant interference through judicial review. The writ petition was dismissed.

Facts

The petitioner, R. Devarasan, represented by its Proprietor, filed a writ petition challenging an order dated 24.08.2024 passed by the Assistant Commissioner (ST), Woraiyur Assessment Circle, Trichy. The impugned order imposed interest on the petitioner for belated payment of taxes under GSTR-3B returns. The petitioner sought to quash this order and requested a fresh order considering the amended provisions of Section 16(5) of the CGST Act and the waiver of interest scheme under Section 128A of the CGST Act, after an opportunity of personal hearing. The tax period in dispute pertains to the payment of taxes on outward supplies for 11 months from April 2019 to March 2020.

Key Issues

1. Whether the impugned order imposing interest on the petitioner for belated payment of taxes under GSTR-3B returns is illegal and against the statute, considering the extended time limit under Section 16(5) of the CGST Act and the applicability of Circular No.136/06/2020-GST. Petitioner's arguments: The petitioner contended that the returns were filed within the extended time limit fixed under Section 16(5) of the GST statutes. They also relied on Circular No.136/06/2020-GST, which provided for nil or reduced interest rates for certain turnover categories for the period February to April 2020, arguing that the impugned order failed to consider these provisions. The petitioner also referred to Circular No.237/31/2024-GST and Notification No.22/2024-Central Tax concerning input tax credit rejection for belated filing. Respondent's arguments: The respondent submitted that the proposal regarding invalid input tax credit under Section 16(4) was dropped. Regarding the interest on late payment, the respondent clarified that Circular No.136/06/2020-GST is applicable only if GSTR-3B returns were filed and taxes paid within the due dates specified in relevant notifications. The respondent asserted that the petitioner failed to meet these conditions.