Section 73 of the CGST Act, 2017 – Imposition of Interest & Penalty – ITC availed but not utilized--–-The petitioner prayed for a writ of Certiorari, to quash the impugned order in original dated 04.05.2020.  The petitioner submitted that they claimed the unavailed CENVAT credit through TRAN-1. The respondent has informed that the return in ER-1, for the first quarter of 2017 has not been filed by the petitioner. Subsequently, the petitioner filed ER-1 through online on ACES portal. However, the said uploaded returns were rejected by portal due to the technical glitches. The said transitional credit was neither utilised nor refunded, but remained as excess credit till the date of reversal. Thereafter, the respondent issued SCN and decided the matter by imposing interest and penalty also. The counsel for the petitioner contended that no such demand of interest could be made in the present case. The court observed that as the appropriation of the tax demand from the credit is concerned, it cannot carry any interest. Further, at no point of time, the ITC was either availed or utilised by the petitioner, that is, one of the pre-requisite under which only penalty can be imposed under Section 122(2)(a).

Held that:- The Hon’ble High Court set aside the demand of interest, and imposition of penalty, as the same are unjustifiable and unlawful.