Page 23 - BANKING FINANCE MARCH 2024

LEGAL UPDATE

The high court, however, clarified that The Advocate General said, "That's the interest is not payable when there is
there may be "cases of arbitrary exer- aim, and if that aim is achieved, then input task credit (ITC) available. In-
cise of power under the anti-profiteer- the purpose for which the exercise was stead of appealing to the
ing mechanism". The remedy for these undertaken should come to an end." Supreme Court, the government in-
would be to "set aside such orders on
SC asks CJ to decide on judge's suo serted a new proviso to Section 50(1)
merits".
motu action against ministers in Tamil of the GST Act, with retrospective ef-
Nadu Supreme Court of India fect to align with the judgement.
Those who gained from
The bench, presided by Chief Justice Unfortunately, in the Refex industries
quota should make way of India D Y Chandrachud, comprises case, one issue was left out. It was
for more backward: SC Justices B R Gavai, Vikram Nath, Bela about levy of delayed payment inter-
M Trivedi, Pankaj Mithal, Manoj Misra est for GST even if cash is paid by the
The Supreme Court said that those and Satish Chandra Sharma. taxpayer and lying as balance in the
among the backward castes who were Electronic Cash Ledger. The GST au-
entitled to reservation and had ben- It is also examining the validity of the thorities claimed that the cash paid is
efited from it should now move out of Punjab Scheduled Castes and Back- just a deposit and not a payment un-
the reserved category and make way ward Classes (Reservation in Services)
Act, 2006 which provided 50 per cent der the GST Act and hence despite
for the more backward among them cash paid to the department, the 18
to avail the benefit of the affirmative quota and first preference to Valmikis
and Mazhabi Sikhs in public jobs within per cent interest is payable. The inter-
action. est clock will stop only after the tax-
the quota meant for the Scheduled
As a 7-judge Constitution Bench began payer files the GSTR 3B.
Castes. In 2010, the Punjab and
hearing a reference on whether the Haryana High Court struck down Sec- In the Eicher Motors case, the com-
Supreme Court's judgement in E V
tion 4(5) of the Punjab law as uncon- pany had deposited the entire GST
Chinnaiah vs State of Andhra Pradesh stitutional, one of the grounds being payment in time but could only file the
& Others needs a relook - the 2004 that it violated the judgement in the return late due to some technical is-
ruling had said that Scheduled Castes
Chinnaiah case. sues. The department issued a claim
(SCs) form homogenous classes and
for Rs. 23.76 crore interest, after 6
there cannot be any sub-division years. So, the core issue before the
among them - Justice Vikram Nath, A ruling in the interest of court was whether the 18 per cent
summarising the arguments of Punjab GST-paying taxpayers interest is chargeable on the dues al-
Advocate General Gurminder Singh, On January 23, 2024, Madras High ready paid to the GST department.
remarked: "Why should not be there
court pronounced a brilliant judge-
an exclusion? According to you, ment in the Eicher Motors case, which The Jharkhand HC gave a judgment
amongst a particular category, some of went against the GST department and saying interest is leviable. In my article
the sub-castes have done better. They also against Jharkhand High Court's published in gavel on January 29, 2023,
are the forward in that category. They judgement in the RSB Transmission I had argued that the Jharkhand HC's
should come out of that and compete judgement was erroneous. My argu-
case. ment was that cash paid was already
with the general. Why stay there? And
This is the second time that the Ma- in government coffers and hence it
let the remaining who are still back-
dras high court had stood up for the would result in a case of "undue enrich-
ward within the backward, let them
taxpayer. Earlier in a landmark judge- ment" on the part of the government,
get the reservation. Once you achieve
the concept of reservation, you should ment in Refex Industries case in Janu- which used the money and charged 18
pull out of that reservation." ary 2020, Madras HC held that GST per cent interest.

20 | 2024 | MARCH | BANKING FINANCE