Section 50 of the CGST Act, 2017— Interest —-- The petitioner challenged an order in original dated 18.11.2020. The petitioner migrated into the regime of GST on and from 01.07.2017. Tran-1 had been filed on 10.07.2017 but the transitioned credit did not find place in the ECL. The petitioner reflected the same as available ITC in its retention and in Form GSTR-3B return and utilised the said credit. Based on the audit objection, a show cause notice was issued on 26.07.2019 proposing to recover the interest invoking section 50(3) @24%. The court observed that the flaw had been occasioned in the maintenance of the ECL by the revenue. Thus, it was quite justified for the petitioner to ensure, by all legitimate methods possible, that the credit available was presumed for utilization, as and when required. The liability to interest will only in a situation where there has been actual utilisation of credit by the assessee concerned. By virtue of the Amendment in 2022 that has retrospective effect from 2017, it is only when ITC has been wrongly availed and utilized with a revenue impact, that interest liability is attracted. In the present case, the original error of non-maintenance of ECL is admittedly attributable to the department. Moreover, the petitioner has not utilized the credit.

Held that:- The Hon’ble High Court set aside the impugned order to the extent to which it levies interest under Section 50(3).