Calcutta High Court (Appellete Side)
Lexus Motors Ltd. & Anr vs Joint Commissioner Of State Tax on 20 September, 2019
Author: Arindam Sinha
Bench: Arindam Sinha
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20.09.2019 W. P. 13253 (W) of 2019
Item No.10
Ct. No.4
dc.
Lexus Motors Ltd. & Anr.
versus
Joint Commissioner of State Tax,
Government of West Bengal & Ors.
Mr. J. P. Khaitan, Sr.Adv.,
Mr. Agnibesh Sengupta,
Mr. Avishek Guha ... For Petitioners.
Mr. Abhratosh Majumdar, Ld. A.A.G.,
Mr. Prithu Dudhoria,
Mr. Avra Majumdar ... For State-Respondents.
Mr. Sujit Mitra ... For Union of India.
Petitioner by this writ petition seeks, inter alia,
declaration, it is entitled to avail Input Tax Credit (ITC)
under GST Act before due date of monthly return and is not
required to pay any interest under section 50, with
reference to such input tax, for any delay in filing monthly
return and has impugned order dated 6th June, 2019
demanding payment of interest at Rs.1,52,94,475/-
Mr. Khaitan, learned senior advocate appears on
behalf of petitioner and submits, ITC of petitioner is credit
available to it on tax already paid. There cannot be interest
charged thereon. He refers to sub-sections (1) and (2) of
section 50 in Central Goods and Services Tax Act, 2017 to
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submit without prejudice, even if there is interest to be paid
thereon, prescription for calculation of it has not yet been
provided. He refers to Agenda for 31st GST Council Meeting
(22nd December 2018), in particular item 7(xx), to
paragraph 3 thereunder. He also refers paragraphs 4 and 6.
Two sentences from paragraph 3 are extracted and
reproduced below :
"Thus, although the law permits part payment of tax
but no such facility has been yet made available on the
common portal. This being the case, a registered
person cannot even avail his eligible ITC as he cannot
furnish his return unless he is in a position to deposit
his entire tax liability as self-assessed by him. This
inflexibility of the system increases the interest
burden. The same is illustrated as below:
..................................................
..................................................." He hands up extract from Finance (No.2) Act, 2019. He relies on clause (b) under sub-section (2) of section 1 and proviso to section 100, to cause amendment of section 50 (on notification). He prays for interim order pending adjudication.
Mr. Majumdar, learned senior advocate, Additional Advocate General draws attention to impugned order 3 dated 6th June, 2019. Two paragraphs from the order are reproduced below :
"The RTP is liable to pay interest as per the provision of section 50(1) of the WBGST Act, 2017. It is seen from sub- section (1) of section 50 that the liability to pay interest arises automatically, when a person who is liable to pay tax, fails to pay the tax to the Government within the period prescribed. In fact, the liability to pay interest under section 50(1) arises even without any assessment, as the person is required to pay such interest "on his own". Therefore, it is clear that the liability to pay interest under section 50(1) is self-imposed and also automatic, without any determination by any one.
However, a computation sheet of Interest under section 50(1) has already been sent to the RTP through e-mail on 27/09/2018 and issued reminder on 29/05/2019 & 03/06/2019 but the RTP has failed to make payment till date."
He submits, the liability to pay interest is automatic and is to be self-imposed. The notice was issued in exercise of power under provisions in sub-section (3) of Section
79. Hearing is interrupted since computation sheet of interest issued to petitioner has not been disclosed. Petitioner has leave to file supplementary affidavit, which 4 will be accepted on adjourned date on advance copy served.
List on 26th September, 2019 at 3 p.m. (Arindam Sinha, J.)