A direction is issued to the appropriate authority to compute the interest liability for belated remittances of cash and refund the balance of the amount collected from the petitioner
Section 50 of the CGST Act, 2017 — Interest – The petitioners’ argued that the credit was available even prior to the arising of the output tax liability and hence the question of delay does not arise, no opportunity was granted prior to raising of the impugned demand and consequential proceedings, interest is a measure of compensation and since ITC is already available in the electronic ledger. The petitioners submitted that the proviso to Section 50, states that interest shall be levied only on that part of that paid in cash, has been inserted to set right an anomaly and is therefore retrospective in operation. Reliance is placed on (i) Eicher Motors Ltd. Vs. Union of India (ii) Pratibha Processors vs. Union of India (iii) Refix Industry Vs. Assistant Commissioner of CGST order dated 06.01.2020. The respondent submitted that Section 41 provides that the entitlement to credit is only with the filing of return on self-assessment basis, this entitlement cannot be availed of till such time a return is filed by an assessee. The court observed that the Board has extended a waiver of recovery for the past period in line with the decisions of the Council and Notification dated 18.09.2020.
Held that:- The Hon’ble High Court allowed the writ petitions and directed the Assessing Officers to raise fresh demands relating to interest on delayed remittances of tax by cash, in accordance with law.