Demand Notice seeking levy of Interest on Gross Tax Liability under Section 50 stayed by Hon’ble Delhi High Court

Today, i.e. 02.03.2020, the Hon’ble High Court of Delhi at New Delhi, has in a petition challenging the demand notice issued by Department over payment of interest on gross tax liabilty, granted stay in the matter of Sunrise Autoworld Pvt. Ltd. v. Union of India.

The Department has sought to levy interest even on the input tax credit which stood credited in the electronic credit ledger and hence was already lying with the Government. That it is settled principle of law that input tax credit is as good as tax paid, and hence there was no delayed payment of tax in case where the Petitioner had duly adjusted ITC with liability as per GSTR-3B in its books.

That in the instant case the Petitioner has already paid and deposited admitted interest payable on delayed cash payment of tax liability. However, the Respondent Assistant Commissioner has issued demand notice seeking to recover interest on gross tax liability arising due to belated filing of statement in Form GSTR-3B.

The matter was argued by Adv. Puneet Agrawal, with Adv. Gaurav Gupta.

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