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The Petitioner challenged the order dated 27.07.2021 wherein interest was levied u/s 50 of the CGST Act relating to interest on cash remittances as well as remittances by way of adjustment of Electronic Credit Register.
In connection thereof, Madras HC referring to the provisions of sec 42 of the CGST Act observed that the provisions are not applicable in the instant case wherein the Petitioner has revered the ITC and voluntary paid the tax in Form DRC-03 upon receipt of the of intimation of the wrongful availment. The provisions of Section 42 can only be invoked in a situation where the mismatch is on account of the error in the database of the revenue or a mistake that has been occasioned at the end of the revenue. In a case where the claim of ITC by an assessee is erroneous, as in the instant case, then the question of Section 42 does not arise at all, since it is not the case of mismatch, one of wrongful claim of ITC. Reliance was also placed upon the case of Maansarovar Motors Private Limited v/s The Assistant Commissioner, Poonamallee Division, Chennai (W.P.Nos.28437 of 20190).
Accordingly, it was held that levy of interest u/s 50 of the CGST Act will be there on cash remittances of tax being compensatory and mandatory and no interest shall be levied on remittances by way of adjustment of Electronic Credit Register.
F1 Auto Components P ltd [W.P. No. 6631 of 2021 and WMP No. 7188 of 2021]
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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