Page 58 - GSTL_16th July 2020_Vol. 38_Part 3

296 GST LAW TIMES [ Vol. 38
in September, 2017 if the respondents had not given the petitioner to understand
that the error would be corrected in view of the Circular dated 1-9-2017. It was
pointed out that even during the course of hearing of the application/petition
also, the respondents had submitted that the petitioner was asked to pay tax with
interest only in March, 2019 after issuing the letter dated 7-3-2019, which was
about eighteen months, after creating an impression which gave rise to a bona fide
belief on the part of the petitioner that the issue would be sorted out in due
course. It was submitted that the petitioner had duly filed the return for the
month of August, 2017 and had also deposited that tax payable for such period;
however, on account of glitches in the system such amount could not be credited
to the Government account. It was submitted that the petitioner had thereafter
immediately approached the respondent authorities for resolving the issue; how-
ever, it was on account of the default on the part of the respondent authorities
that the error could be corrected only in October, 2019. It was submitted that on
account of default on the part of the respondents, the petitioner should not be
saddled with the liability of paying excessive interest at the rate of 18% for the
intervening period between the date of filing of the return and the filing of form
GSTR-3B in October, 2019.
8. This Court has also heard Mr. Nirzar Desai, Learned Senior Standing
Counsel for the respondents, who has reiterated the averments made in the affi-
davit in reply filed on behalf of the respondents.
9. From the facts noted hereinabove, it is apparent that the petitioner
had uploaded the return for August, 2017 within the period provided therefor.
The petitioner paid an amount aggregating to Rs. 114,51,11,746/- in cash towards
the tax liability and also made payment of Rs. 14,12,35,762/- in the credit ledger
as ITC utilisation; however the same was not entered in the petitioner’s electronic
liability register as provided under Rule 88(2) of the CGST Rules. The situation,
therefore, is that though the petitioner had discharged the tax liability aggregat-
ing Rs. 128.63 crores (rounded off), such liability was not shown as discharged in
the electronic liability register only on account of glitches and crashing of the
system on 20th and 21st September, 2017. Consequently, despite the fact that the
petitioner had discharged the tax liability in time, it was still treated as a default-
er because all the figures in GSTR-3B for August, 2017 are zeros owing to system
failure.
10. As noticed earlier, immediately thereafter, the petitioner had con-
tacted the respondent authorities and had made attempts to do whatever, it was
told. However, it was only by the communication dated 7-3-2019, that the peti-
tioner was informed that the Central Board of Excise and Customs had issued
Circular No. 26/26/2017-GST, dated 29-12-2017 wherein it has been specified
that the taxpayer may adjust the amount not paid or short paid or excess paid in
the GSTR-3B of the previous month in the return of the following tax period. It
was further stated that the petitioner was already requested to follow the instruc-
tion/guideline mentioned in paragraph 3 of Circular No. 26/26/2017, dated 29-
12-2017 by the Deputy Commissioner vide their office letter dated 28-10-2018.
11. In terms of the above Circular No. 26/26/2017-GST, dated 29-12-
2017, the petitioner was required to report the additional liability in the return of
the next month and pay tax with interest. In effect and substance, therefore, the
petitioner was required to pay interest at the rate of 18% for a period of eighteen
months on the tax liability which it had already discharged on time, without
there being any default on its part.
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