Fashion Marble and Granite Company Pvt Ltd. vs. Assistant State Tax officers, SGST Department, Ernakulam – (2018) 17 G.S.T.L 18 Kerala)

Payment of tax and penalty on detained goods through cash/ demand draft is untenable, when the same is paid through GST portal.

Facts: In this case, the Competent Authority had detained goods of assessee under transport and issued on it a show cause notice under section 129(3) demanding tax and penalty . The Assessee paid amount of tax and penalty through portal of GST under section 49 ,when assessee wanted release of goods, the Competent Authority insisted that assessee ought to have paid amount of tax and penalty ‘either in cash or through demand draft. Being aggrieved the petition was filed by the Petitioner assessee on the ground that the proper officer insisted the Petitioner to pay the tax and penalty either in cash or through demand draft to the department.

Issue: Whether the competent authority was justified in insisting assessee to pay amount of tax and penalty ‘either in cash or through demand draft. Further, whether payment of tax and penalty through portal of GST was eminently sustainable.

Held: In the said matter, the High Court of Kerala directs the Competent authority to release the detained goods and the vehicle where the petitioner had paid the tax and penalty amount as demanded through GST portal. It was held that where the amount of penalty has been paid through electronic mode then it is not required to be paid either in cash or demand draft and therefore the Department was directed to release the goods.

As per the provision of the Sec 49 of the CGST Act-

“Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.”

“(3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.”

From the above provision it can be readily deduced that the amount of penalty can be paid by the assessee via electronically and need not to be paid either in cash or through demand draft.

 

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