Delayed filing of return need not involve interest liability as long as cash deposited into ECL in time

No interest liability where amounts credited to electronic cash ledger but not utilized for tax payment due to delayed return filing

Editor:

The Single Member Bench of the Madras High Court in M/s Eicher Motors Limited Vs The Superintendent of GST & Central Excise & Anr. (W.P 16866 & 22013 of 2023 (Mad.)) pronounced on 23.01.2024 has held that once the amount is deposited into the Electronic Cash Ledger by generating GST PMT 06 challan and the amount is credited to Government account simultaneously, the tax liability of the registered person would stand discharged to that extent. Subsequent debit in the ledger for paying tax while filing Form GSTR 3B return would only be an accounting entry and that cannot necessarily mean interest liability for the registered person where such debit in ledger is delayed beyond the due date for paying tax and filing return.

The High Court has disagreed with the earlier Division Bench verdict of the Jharkhand High Court in RSB Transmission (India) Ltd Vs UOI which was in favour of Revenue. The Counsel here has argued that amount stands credited to the Government account at the time of deposit into ECL relying on RBI FAQ and that getting the same back would entail refund process u/s 54. The amount once credited to Government account, belongs to the Govt and liability is said to have been discharged. Reliance was also placed on Government reporting on tax collections based on deposits into ECL.

The assessee here had delayed return filing owing to credits from earlier law not being transitioned in time due to technical glitches. While this prevented him from filing returns, the amount liable to be paid had been deposited under concerned heads i.e. CGST, SGST & IGST on the ECL within due dates each month.

It remains to be seen whether or not the view taken above would prevail in the long run and protracted litigation cannot be ruled out.