M/S.Pryme Promoters vs. The State Tax Officer (Adjudication - I)

Held

The Court did not decide the merits of the petitioner's claim regarding the justification of the interest levied. Instead, it acknowledged the submission made by the learned Government Advocate that the petitioner possesses an appeal remedy before the appellate Deputy Commissioner (ST), Madurai, under Section 107 of the TNGST Act, 2017. Consequently, the writ petition was disposed of by granting the petitioner liberty to approach the appellate authority. The Court directed that if an appeal is filed within two weeks from the date of receiving a copy of the order, the appellate authority shall entertain the appeal without considering the period of limitation and shall dispose of it in accordance with the law within two months thereafter. No order as to costs was made. The operative direction is to permit the petitioner to file an appeal out of time and for the appellate authority to decide it on merits.

Facts

The petitioner, M/s. Pryme Promoters, filed a writ petition challenging an assessment order dated July 31, 2024, issued by the State Tax Officer (Adjudication - I), Madurai, for the tax period 2021-2022. The petitioner contended that the delay in filing returns should not be equated with unaccounted transactions for imposing interest, especially since the differential tax was voluntarily paid into the electronic cash ledger before the show cause notice was issued. The respondent revenue authority argued that the petitioner had an alternative statutory remedy of appeal before the appellate Deputy Commissioner (ST) under Section 107 of the TNGST Act, 2017, and had approached the High Court directly without availing this remedy.

Key Issues

1. Whether the interest levied on the petitioner is justifiable, considering the voluntary payment of differential tax into the electronic cash ledger prior to the issuance of the show cause notice, and whether delay in filing returns can be equated with unaccounted transactions for imposing interest under the GST regime? (Question of law) Petitioner's arguments: The petitioner argued that the delay in filing returns should not automatically lead to the imposition of interest, particularly when the differential tax was paid voluntarily and set off before the show cause notice. They contended that their case is distinguishable from situations involving fraudulent retention of tax. They relied on the case of M/s. EICHER MOTORS LIMITED vs THE SUPERINTENDENT OF GST AND CENTRAL EXCISE, RANGE II, 2024 (81) G.S.T.L. 418 (Mad.). Respondent's arguments: The respondent argued that the petitioner had an available statutory remedy of appeal under Section 107 of the TNGST Act, 2017, before the appellate Deputy Commissioner (ST), Madurai, and that the petitioner had bypassed this remedy by directly approaching the High Court.