Page 21 - Banking Finance March 2023

LEGAL UPDATE

Legal

News

Ruling against the interest deposited in the GST portal, and only is judged everyday by the public, liti-
then is the GST liability seen to be dis- gants and lawyers and their conduct is
of GST collection
charged. Till then, the cash deposited always under scrutiny as they speak
Finance Bill 2019-20 amended the Cen- by the taxpayer to the exchequer is through their judgments.
tral Goods and Services Tax (CGST) Act considered interest-free deposit. The
The observations formed part of an
with retrospective effect by inserting
government gets to have the cake and
order released by the top court giving
a new proviso in section 50(1) to cal-
eat it too.
reasons for not entertaining a set of
culate the interest on delayed GST
The Jharkhand High Court delivered a two petitions challenging the recom-
payment.
crucial judgement on October 18, mendation to appoint Lekshmana
This amendment has created an arbi- 2022, on a writ filed by RSB Transmis-
Chandra Victoria Gowri (as she then
trary and unlawful differentiation - sions (India) Pvt Ltd, and confirmed
was) as an additional judge of the
when arriving at the net GST cash tax that under the current scheme of the
Madras high court. The top court had
liability - between the balance in the CGST Act, any cash deposit in the ECR
dismissed the petitions, the same day
electronic cash register (ECR) due to prior to the due date of filing GSTR 3B
when she took oath, while indicating
input tax credit (ITC) and the balance return does not amount to discharge
that detailed reasons will follow.
in the electronic credit register (ECrR) of tax liability.
due on cash paid to the exchequer's A bench of justices Sanjiv Khanna and
This is the correct interpretation of GST
account. BR Gavai said, "Not only is the conduct
laws, aligned with the judgement of
It is illogical that the interpretation of the Madras High Court in the Yamaha and judgments delivered considered at
the words 'net cash tax liability' ex- Motors case. the time of confirmation, a judge is
cludes cash already received but in- judged everyday by the lawyers, liti-
However, the judgement has dealt
cludes cash yet to be received (input gants and the public, as the courts are
wrongly with the petitioner's prayer to
tax credit) by the exchequer. declare the provisions of section 50(1) open and the judges speak by giving
The GST delayed payment interest of the CGST Act as contradictory, arbi- reasons in writing for their decisions."
clause is one-sided and varies greatly trary, unreasonable and violative of "It goes without saying that the con-
article 14 and article 19(1)(g) of the
from the Income Tax Act. For example, duct of the judge and her/his decisions
Constitution and wrongly concluded,
if you deposit any income tax, even must reflect and show independence,
based on incorrect facts.
part payment, with challan, it is con- adherence to the democratic and con-
sidered tax paid. Unfortunately, this is stitutional values," the short order of
A judge is judged every-
not valid in GST. First you must deposit 9 pages said. "This is necessary as the
the tax due in full, file the monthly day, says SC judiciary holds the centre stage in pro-
return GSTR 3B, and adjust the cash The Supreme Court said that a judge tecting and strengthening democracy
BANKING FINANCE | MARCH | 2023 | 19