2026-VIL-233-GSTAT-LCK
  1. Home
  2. 2026-VIL-233-GSTAT-LCK

SGST Tribunal

GST - Liability to interest under Section 50 and Rule 88B on tax voluntarily paid through FORM GST DRC-03 before issuance of SCN - Certain B2C sales of FY 2020-21 were inadvertently omitted from monthly GSTR-1 and GSTR-3B due to a clerical error but were disclosed in the Annual Return GSTR-9/9C - Appellant discharged the entire tax liability through DRC-03, before issuance of any SCN, without payment of interest - The demand of interest was confirmed by the adjudicating authority and upheld by FAA - Whether interest was correctly calculated without considering the balances in the Electronic Cash and Credit Ledgers - HELD - The contention that no interest can arise merely because tax was voluntarily paid before SCN is not accepted. Interest is a statutory consequence of delayed payment of tax and is to be determined in accordance with Section 50 and Rule 88B. Since the tax for FY 2020-21 was paid on 04.03.2022 through DRC-03, Section 50 is attracted – However, the interest cannot be computed on the entire tax liability and has to be determined with reference to the month-wise liability, the respective due dates, the date of actual discharge of tax and the amount, if any, required to be discharged through the Electronic Cash Ledger - The demand of interest is set aside to the extent of the existing computation and the proper officer is directed to recompute it strictly in accordance with Section 50 read with Rule 88B after month-wise verification of the omitted turnover and the ledgers - Penalty merely on account of inadvertent non-reporting of turnover in monthly returns is not justified and is set aside - The appeal is partly allowed - Imposition of penalty under Section 73 where entire tax liability was voluntarily paid before issuance of SCN in terms of Section 73(5) and 73(6) - Turnover omitted from monthly returns due to inadvertent clerical error was reflected in the books of account and disclosed in the Annual Return - Appellant on noticing the omission discharged the entire tax liability through DRC-03 prior to SCN - Whether penalty is justified for an inadvertent clerical error in the absence of any intention to evade tax and the tax liability was voluntarily discharged before SCN - HELD - Section 73(5) is applicable as the entire tax liability was discharged before issuance of SCN. The turnover was not in dispute and the Respondent itself verified the month-wise reconciliation and did not dispute the correctness of the figures. The turnover was neither outside the books of account nor concealed from the Department, and the discrepancy arose merely from non-reporting in the monthly returns - The conduct of the Appellant, who came forward on its own without waiting for the Department to initiate proceedings, is a material circumstance which cannot be ignored - Penalty merely on account of inadvertent non-reporting of turnover in monthly returns is not justified and is set aside.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

GST & Customs updates: Sep'26
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?