M/S.Kwangjin India Authosystems ... vs The Assistant Commissioner on 1 August, 2019
Madras High Court
M/S.Kwangjin India Authosystems … vs The Assistant Commissioner on 1 August, 2019
W.P.No.173
WMP.No.16
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.08.2019
CORAM
THE HONOURABLE MR. JUSTICE M. SUNDAR
W.P.No.17393 of 2019
&
WMP.No.16883 of 2019
M/s.Kwangjin India Authosystems Pvt.Ltd.
Represented by its Accounts Manager
Mr.S.Subbiah
1.The Assistant Commissioner,
–Vs–
…Pe
Office of the Deputy Commissioner of GST & Central Excise, Superumbudur Division,
Chennai Outer Commissionerate,
C-48, TNHB Building, Second Avenue,
Anna Nagar, Chennai-600040
2.The Branch Manager,
HDFC Bank,
No.84A, Bangalore High Road,
Sriperambadur,
Kanchipuram-602 106 … Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of Indi
praying to issue a writ of certiorarified Mandamus, calling for the impug
communication dated 03.05.2019 in File No.C.No.IV/16/22/2019-GST on the
file of the first respondent and quash the same as illegal, arbitrary and
1/14
W.P.No.
WMP.No.
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M/S.Kwangjin India Authosystems … vs The Assistant Commissioner on 1 August, 2019
of principle of natural justice and consequently direct the second respon
herein not to take any coercive action against the petitioner.
For Petitioners : Mr.S.Muthuvenkataraman
For Respondents : Mr.V.Sundareswaran
Senior Panel Counsel (GST)
O R D E R
Mr.S.Muthuvenkataraman, learned counsel on record for writ petitioner and Mr.V.Sundareswaran, learned Panel Counsel (GST) on behalf of the first respondent are before this Court. To be noted, second respondent is Branch Manager of the Bank in which the writ petitioner has an account, which is subject matter of attachment and therefore, the second respondent is only a formal party and in the nature of garnishee.
- In this backdrop, with consent of learned counsel on both sides, the main writ petition is taken up, heard out and is being disposed of.
- Be that as it may, the first respondent, who is the contesting respondent has filed counter affidavit dated 09.07.2019. The subject matter of instant writ petition arises under the ‘Central Goods and Services Tax Act, 2017’ (CGST Act for the sake of brevity). http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- There is no disputation that the CGST regime came into operation on and from 01.07.2017. In the light of CGST Regime coming into operation on and from 01.07.2017, dealers were entitled to get credits, which were available in their accounts or electronic ledger account (as was the practice under fiscal law which was operating upto 30.06.2017) can be transferred to the credit of the dealer under the CGST Regime.
- It is the case of the writ petitioner in the instant writ petition that the writ petitioner had certain credits in the form of ‘Input Tax Credit’ (‘ITC’ for brevity) as on 30.06.2017, under the aforesaid circumstances, owing to the CGST regime becoming operational, the writ petitioner became liable to pay ‘Good and Services Tax'(‘GST’for brevity) on a monthly basis from the month of July 2017. With regard to payment of GST from July of 2017, there is no disputation or disagreement before this Court that under the CGST Act there is a provision to pay tax either by cash or by way of credits which were available to the credit of a dealer as of 30.06.2017.
- In the light of the aforesaid undisputed position, it is the case of the writ petitioner that when the writ petitioner became liable to pay GST from July 2017 it choose to pay the tax by way of ITC which stood to its credit as of 30.06.2017. When the writ petitioner attempted to do so, there were a
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M/S.Kwangjin India Authosystems … vs The Assistant Commissioner on 1 August, 2019
technical glitch and therefore, the writ petitioner encountered enormous difficulty having the payments made in such a manner is the specific http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019 submission made by learned counsel for the writ petitioner.
- In support of this submission learned counsel for the writ petitioner drew the attention of this Court to two documents, one is a complaint given by the writ petitioner to the GST Seva Kendra on 18.09.2017, which is as follows: http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- The other is the screen shots of the aborted attempts made by the writ petitioner to pay GST in the aforesaid manner. The screen shots are as follows:
http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- In sum and substance, the writ petitioner’s case is that the writ petitioner has neither avoided nor evaded payment of GST but could not pay GST solely owing to technical glitch in Department’s portal and the writ petitioner took all efforts to have the same redressed/rectified, but in vain. http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- To buttress the writ petitioners bonafides in this regard, learned counsel for the writ petitioner drew the attention of this Court to GST payment receipt dated 20.10.2017 and the corresponding bank statement dated 20.01.2018, to demonstrate that with regard to September and December months for the year 2017, there was a shortfall with regard to available ITC qua GST that had to be paid and the shortfall component was paid by cash.
- To be noted, with regard to instant case on hand, the writ petitioner has been called upon to pay interest of little over Rs.1.64 crores (Rs.1,64,49,541 to be precise) towards delay in payment of GST for seven months from July 2017 to January 2018 (both months inclusive).
- There is no disputation or disagreement before this Court that post January 2018, the technical glitch of Tax Department’s portal stood rectified and the writ petitioner has been paying GST through the relevant portal. Therefore, this entire writ petition is confined to payment of interest, for what according to the first respondent is, delayed payment of GST for seven months i.e., July 2017 to January 2018.
- Before this Court adverts to the technical glitch, there is no disputation that the dates on which the monthly GST became payable for the seven months and the dates on which they were actually paid. http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- Based on the aforesaid dates of payment, according to the first respondent the number of days of delay in payment of GST for the aforesaid seven months is as follows:
Sl.No Month Due date to pay Tax Date of debit .
1. July-17 25-Aug-2017 20-Feb
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M/S.Kwangjin India Authosystems … vs The Assistant Commissioner on 1 August, 2019
2. Aug-17 20-Sep-2019 22-Feb
3. Sep-17 20-Oct-2019 22-Feb
4. Oct-17 20-Nov-2019 22-Feb
5. Nov-17 20-Dec-2019 24-Feb
6. Dec-17 20-Jan-2019 26-Feb
7. Jan-17 20-Feb-2019 26-Feb
15. With regard to the technical glitch, first respondent in the counter affidavit has averred that the writ petitioner has not provided help desk details and therefore, the technical glitch plea is untenable. What is of utmost significance is that with regard to availability of ITC, there is no disputation. It is nobodys case that the writ petitioner did not have enough ITC credit as of 30.06.2017 and it equally nobody’s case that the technical glitch is now being used as an excuse for late-payment. Therefore, the whole issue boils down to one question as to whether the writ petitioner encountered technical glitch in payment of monthly GST for the aforesaid seven months i.e., from July 2017 to January 2018.
http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- Prima facie, the aforesaid complaint made by the writ petitioner to the GST Seva Kendra as well as the screen shots which have been reproduced (supra) show that the writ petitioner had encountered difficulty, but in the light of the disputation, this Court is of the considered view that it would be appropriate to leave it to the technical body concerned to decide whether there was a technical glitch at all.
- With regard to the technical body which would decide/resolve such issues, attention of this Court is drawn to a circular dated 03.04.2018 issued by the Government of India, Ministry of Finance, Department of Revenue Central Board of Indirect Taxes and Customs. Adverting to the opening paragraph and paragraph four of this Circular, it is submitted that Government has formed an IT-Grievance Redressal Mechanism. Opening paragraph and paragraph four read as follows:
It has been decided to put in place an IT-Grievance Redressal Mechanism to address
the difficulties faced by a section of tax payers owing to technical glitches on the GST
portal and the relief that needs to be given to them. The relief could be in the nature
of allowing filing of any Form or Return prescribed in law or amending any Form or Return already filed. The details of the said grievance redressal mechanism are provided below:
4. IT-Grievance Redressal Committee:
Any issue which needs to be addressed through this mechanism shall be identified by
GSTN and the method of resolution approved by the GST http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019 Implementation Committee (GIC) which shall act as the IT Grievance Redressal Committee. In GIC meetings convened
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M/S.Kwangjin India Authosystems … vs The Assistant Commissioner on 1 August, 2019
to address IT issues or IT glitches, the CEO, GSTN and the DG (Systems), CBEC shall participate in these meetings as special invites.
- This Court is informed that any complaint to the aforesaid ITA Grievance Redressal Committee should be given to the jurisdictional Principal Commissioner, who in turn will forward it to the aforesaid Committee through the GST network or what is the known as GSTN.
- In the light of the narrative thus far, this Court deems it appropriate to pass the following order:
a) Writ petitioner shall provide a bank guarantee for Rs.25 lakhs in a format required
by the first respondent within one week from the date of receipt of a copy of this order.
b) One of the share holding directors of the writ petitioner company shall provide a
personal bond in a format as required by first respondent for the balance sum within
one week from the date of receipt of a copy of this order. To be noted after deducting
25 lakhs bank guarantee, the balance sum is Rs.1,39,49,541/-.
- Thereafter writ petitioner shall send a detailed communication addressed to the Principal Commissioner of GST and Central Excise, North Commissionerate, Chennai 34, within one week therefrom setting out details of the technical glitch http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019 encountered by the writ petitioner in its aborted attempts to pay GST for the months of July 2017 to January 2018 (both months inclusive i.e seven months in all).
- The Jurisdictional Principal Commissioner shall do the needful in this regard as expeditiously as possible to ensure that the same is reached to the I.T.Grievance Redressal Committee via GSTN, so that the I.T. Grievance Redressal Committee can take a decision on the technical glitch within one week from the date of submission of the representation to the Principal Commissioner.
- It is open to the I.T. Grievance Redressal Committee to call for further information from the writ petitioner and/or afford a personal hearing, if deemed necessary, to take a decision on the complaint of technical glitch encountered by the writ petitioner.
- The decision of the Committee shall be communicated to the writ petitioner under due acknowledgement within seven working days from the date of the decision.
- As the Principal Commissioner is not arrayed as a party to the instant writ petition, learned standing counsel for Revenue shall communicate this order to the jurisdictional Principal Commissioner with a request to do the needful. http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019
- Though obvious, the demand of interest being dropped, pursued or partly pursued will depend upon the decision taken by the I.T. Grievance Redressal Committee.
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M/S.Kwangjin India Authosystems … vs The Assistant Commissioner on 1 August, 2019
i) On deposit of 25 lakhs and production of bank guarantee in the aforesaid manner, the attachment of the writ petitioner’s account in second respondent bank will stand lifted/raised and the impugned communication dated 03.05.2019 bearing C.No.IV/16/22/2019-GST shall be in kept in abeyance till a decision is taken by the I.T. Grievance Redressal Committee and communicated to the Writ Petitioner in the aforesaid manner and within the aforesaid time frame.
20. With the above directions, this writ petition is disposed of. Consequently, connected miscellaneous petition is closed. However, there shall be no order as to costs.
01.08.2019 Index: Yes/No ska http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019 To
- The Assistant Commissioner, Office of the Deputy Commissioner of GST & Central Excise, Superumbudur Division, Chennai Outer Commissionerate, C-48, TNHB Building, Second Avenue, Anna Nagar, Chennai-600040
- The Branch Manager, HDFC Bank, No.84A, Bangalore High Road, Sriperambadur, Kanchipuram-602 106
- Principal Commissioner of GST and Central Excise, North Commissionerate, Chennai 34 http://www.judis.nic.in W.P.No.17393 of 2019 & WMP.No.16883 of 2019 M. SUNDAR ,J,.
ska W.P.No.17393 of 2019 & WMP.No.16883 of 2019 01.08.2019 http://www.judis.nic.in
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