HC Dismisses Interest Demand for Delayed Filing of GSTR-3B Due to Lack of Appropriate Adjudication Proceedings

The Jharkhand High Court in the matter of R.K. Transport Private Limited Vs. Union of India dismisses interest demand for delayed filing of GSTR-3B due to lack of appropriate adjudication proceedings.

The Issue is that Interest amounting to Rs. 83, 96, 873/ on the alleged ground of delay in furnishing GSTR 3B return for the period July 2017 to December 2019 has been levied by the impugned letter dated 28th February 2020 / 2nd March 2020 issued by the respondent no. 2 Assistant Commissioner, CGST and Central Excise, Ranchi.

The Appellant challenged the impugned order on the specific ground that since the liability has been disputed by the petitioner, the same could not have been levied without any adjudication proceeding under Section 73 or 74 of the CGST Act which has not been done admittedly in this case.

The Coram find that the issue at hand is not in dispute that no such proceeding has been initiated in the case of the petitioner, though the liability has been disputed by the petitioner by way of a reply to the notice of recovery under Section 79 of the CGST Act, 2017 vide Annexure 5 dated 9th March 2020 on specific grounds.

The case of the present petitioner stands covered by the ratio rendered by this Court in the case of Mahadeo Construction Co. (supra) as despite disputing the liability towards interest the revenue has raised a demand for payment of interest on the ground of delay in furnishing of GSTR 3B return for the period July 2017 to December 2019 without initiating any adjudication proceedings under Section 73 or 74 of the CGST Act, 2017. Earlier by an order dated 8th May 2020 a Coordinate Bench of this Court had been pleased to grant interim protection from any coercive steps against the petitioner pursuant to the impugned demand at Annexue 4.

The High Court ruled out that “In the light of the discussions made hereinabove and for the reasons recorded, the impugned demand contained in letters dated 28th February 2020 / 2nd March 2020 (Annexure 4) is quashed. Liberty is left to the respondent authorities to initiate appropriate adjudication proceeding s and determine the liability of interest against the petitioner assessee under the relevant applicable provisions Section 73 or 74 of the CGST Act, as the case may be, in accordance with law and after opportunity of hearing to the petitioner.”

The Judgment was made by Justice Aparesh Kumar Singh and Justice Deepak Roshan.

The Advocate for the Petitioner is M r. Sumeet Gadodia and for Respondent is Mr. P.A.S. Pati.

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