Order date – 31 October 2022

 Facts –

• The Petitioner, M/s Abis Export India Private Limited, is a company which involves in production of number of commodities including pet food. 
• The animal feed and pet food were sold by the petitioner's company to different distributors without charging GST and the return was filed. However, when the provisions of GST emerged out of fuming condition and the fact got established that all animal feed are exempted from tax except pet food. 
• The petitioner's company approached the authority showing the difference in its GSTR 1 & GSTR 3B and sought directions from the authorities about the mechanism to rectify its return, but on account of non-availability of the mechanism, the return could not be rectified.
• The petitioner on his own set-off the tax liability in the return submitted in the month of March 2018 for the month of July 2017 to September 2017, yet the authority has sought interest on basis of the differences in the return for the period of July 2017 to September 2017 and demanded interest.
• Aggrieve petitioner filed an appeal.

Issue –

• Whether the interest imposed on the appellant is in order?

Order –

• The Hon’ble High Court found that in 39th GST Council meeting held on 21.06.2019 which has recommended to amend Section 50 vide Section 100 of Finance (No. 2) Act, 2019 and to provide for charging interest on net cash liability and the Council in its meeting on 14.03.2020 recommended charging of interest on net cash tax liability with effect from 01.07.2017 with a retrospective amendment of the Act from the aforesaid date. Further, it issued that the proviso to Section 50 would be retrospective, with effect from 01.07.2017.
• The court also finds that the petitioner was held liable for payment of interest of Rs. 72,69,975 after examining the GSTR 3B which is return as provided under Section 39 of the GST Act. Section 107 (6) of the Act, 2017 provides that no appeal shall be filed under sub-section (1) unless the appellant has paid the tax as provided in Section (a) & (b) of the said section.
• The amendment which has been made effective from 01.07.2017 clearly provides that the interest on tax payable in respect of supplies made during the tax paid and declared in the return for the said period furnished after the due date in accordance with the provisions of Section 39 of the Act, 2017 except where such return is furnished after commencement of any proceedings under Section 73 or 74 of the Act, 2017 shall be levied on that portion of tax i.e. paid by debiting the electronic cash ledger, as such, the amendments are having retrospectively applicability effect, as such, in view of the amendment made by the Central Government, the writ petition is disposed of with a direction to the appellate authority to examine whether in the given facts and circumstances of the case, the petitioner can be extended benefits of amendment made in Section 50.