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The reason for submission of the delayed returns is not due to inaction on the part of the petitioner, but it is a technical fault of the department, for which, the interest cannot be demanded, more particularly when the amount has already been deposited in Electronic Cash Ledger.

Section 50 of the CGST Act — Interest — The petitioner sought directions to declare the proviso to Section 50 applies retrospectively from 01.07.2017 and consequently, set aside the demand notice dated 07.02.2020 for the months July and August, 2017; to declare demand of interest under Section 50 of the Act which is not preceded by an adjudication as per Section 73 of the Act determining the principal amount payable is illegal and contrary to the scheme of the CGST. The petitioner filed GST returns belatedly for the period from July, 2017 to March, 2018 and he was directed to pay interest. The petitioner filed reply to the said notice stating that the reason for submission of the delayed returns is not due to inaction on the part of the petitioner, but it is a technical fault of the department, for which, the interest cannot be demanded, and when the amount has already been deposited in Electronic Cash Ledger. Held that:- The Hon’ble High Court directed respondent to consider the reply and all the relevant facts and afford opportunity of hearing to the petitioner. In case, if the respondent is of the opinion that compliance has not been made by the petitioner properly, appropriate reasoned order may be passed affording opportunity to the petitioner, within a period of one month.