Section 50 of the CGST Act, 2017 – Interest ––- The petitioner challenged an order dated 10.04.2019, wherein the respondent calls upon it to remit interest of a sum of Rs.5,00,00,000/- for belated remittance of GST. The court in earlier order dated 18.01.2021 has accepted one portion of the submissions made. The petitioner has sought to raise additional grounds. The petitioner submitted that it had sufficient ITC credit in both the electronic cash ledger as well as the electronic credit register. Thus, there had been no loss caused to the revenue and hence no justification to levy interest since the interest is only compensatory in nature. The court observed that the respondent has recomputed the interest payable reducing the same from Rs.5,00,00,000/- to an amount of Rs.1,19,00,000/-. Thus, credit to the extent of cash payments effected by the petitioner has been granted to the petitioner. The court observed that the specific issue raised relates to the levy of interest u/s 50 of the Act in a situation where the petitioner has not filed its returns of turnover for a particular period and the remittance of taxes for the aforesaid periods is belated. The petitioner argued that no interest need be levied on the strength of the balances lying to its credit in the ECR and ECrR but this peculiar issue has not been decided in any of the decisions cited.

Held that:- The Hon’ble High Court partly allowed Writ Petition to the extent of the relief granted under order dated 18.01.2021 and the demand, as per aforesaid order, stands confirmed.