A Single Bench of the Kerala High Court has set aside a notice served to petitioner, demanding interest for the period during which the registration of the petitioner was canceled, without due notice for non-filing of returns caused by technical glitches in the Goods and Services Tax Portal.
The petitioner sought to set aside the impugned demand notice. This notice had demanded the petitioner to remit the interest under Section 50(1) of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017, failing which the respondent would initiate action under Section 79 of the CGST Act.
The interest, amounting to Rs. 5,30,919/-, was calculated for the period from July 2017 to March 2018, pertaining to delayed remission of tax.
The petitioner, initially a registered dealer under the Kerala Value Added Tax Act, 2003, transitioned to the CGST Act effective July 1, 2017. The dispute arose when technical issues with the GST network prevented the petitioner from filing returns promptly.
The cancellation of the petitioner’s GSTIN on August 24, 2017, without notice, further complicated matters. The petitioner, unaware of the cancellation, diligently remitted the GST on August 21, 2017. It was only after encountering issues with filing returns that the petitioner discovered the cancellation and promptly notified the authorities.
After a legal battle that led to an interim order on December 21, 2017, restoring the GSTIN, the petitioner faced challenges in filing returns due to delayed access to the online portal. The returns for the affected months were filed between January 1, 2018, and January 18, 2018.
The Bench of Justice Dinesh Kumar Singh acknowledged the petitioner’s predicament, emphasizing that without a valid GSTIN, remitting tax and filing returns were impossible.
The court thus held the impugned order invalid, while granting authorities the liberty to impose penalty on delayed payments post-GSTIN restoration from December 26, 2017. Any subsequent delays would attract interest, the court held.
This judgment clarifies the equitable treatment of businesses facing GSTIN-related challenges and emphasizes the importance of fair application of tax laws.
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