Section 146 of the CGST
Act, 2017 provides that the Government may notify the common elecronic portal
for facilitating the registration, payment of taxes, furnishing of
returns and carrying out other purposes under the said Act. In exercise of the
powers u/s 146 common e-portal (gst.gov.in) and eway bill portal have
been notified and are in operation. It is pertinent to mention here that the
said e-portals are for facilitating the law laid down under the GST laws and
such e-portals cannot override the provisions of law.
In the light of the above
legal position, it has been brought to the notice of the constitutional courts
at many times after the implementation of the GST, that such e-portals are not
working in accordance with the law.
The latest one of such
instances is brought to the notice of Gujarat High Court by way of writ
petition in the case of OCTAGON
COMMUNICATIONS PVT LTD Versus UNION OF INDIA. In this case it was
brought to the notice of the court that there is no condition under the
GST laws for making payment of tax as a pre-condition for filing return of
Form GSTR-3B. It was submitted that in the absence of any such provision,
the on- line system of the respondents which does not allow filing of
returns without payment of tax liability admitted as per such returns is
contrary to legal provisions as a result of which the petitioner is
not able to file return in Form GSTR-3B by 20th April, 2019 and he would
be deprived of his input tax credit. The court as an interim relief
allowed petitioner to file GSTR-3B manually.
The full interim order is
reproduced herebelow:
IN THE HIGH COURT OF
GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL 5873
of APPLICATION NO. 2019
OCTAGON COMMUNICATIONS
PVT LTD
Versus
UNION OF INDIA
Appearance: UCHIT N
SHETH(7336) for the Petitioner(s) No. 1,2
DS AFF.NOT FILED
(N)(11) for the Respondent(s) No. 1
NOTICE SERVED BY DS(5)
for the Respondent(s) No. 2,3
CORAM: HONOURABLE MS.JUSTICE HARSHA
DEVANI and HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date :
18/04/2019
ORAL ORDER
(PER : HONOURABLE
MS.JUSTICE HARSHA DEVANI)
1.
Despite service of
notice, there is no appearance on behalf of the respondents No.2 and 3.
2. Mr. Uchit Sheth, learned advocate for
the petitioner has submitted that there is no condition for making payment of
tax as a pre-condition for filing return of Form GSTR-3B. It was submitted that
in the absence of any such provision, the on- line system of the respondents
which does not allow filing of returns without payment of tax liability
admitted as per such returns is contrary to legal provisions. It was further
submitted that if the petitioner is not able to file return in Form GSTR-3B by
20th April, 2019 the petitioner would be deprived of input tax credit.
3. Having regard to the urgency of the
matter and the fact that there is no response from the respondents No.2 and 3,
by way of ad-interim relief, the petitioner is permitted to file manual returns
in Form GSTR-3B for the months November, 2017 onwards, which would be subject
to final outcome of the petition. Stand over to 13th June, 2019
The above is a
perfect example how the e-portals notified for facilitating the implementation
of law are working in a manner contrary to the provisions of law. To further
elaborate the above instance, it is pertinent to note down that section 39(7)
of the CGST Act provides that the due date of payment of tax would be the last
date of furnishing of return i.e. last date of filing GSTR-3B in the present
situtation.
Thus for an example
the last date for payment of tax for the month of April, 2019 would be on
20th May, 2019, but if a person choses to file his GSTR-3B on 15th on May,
2019, the e-portal would not allow to file GSTR-3B unless tax is paid on 15th
May itself, which is clearly contrary to the provisions of section 39(7).
Another important thing
to be noted here is that one of the conditions for claiming input tax credit
u/s 16 is that a person must have filed his returns, so meaning thereby unless
a person files his GSTR-3B he will not be eligible for his input tax
credit. The implications of the above working of e-portal inconsistent
with the provisions of section 39(7) would be that even if a person has ITC to
pay off the output tax partially, he would not be able to do so, which would
result in payment of interest on the gross output tax liability as per section
50.
For example if a
person has output tax liability of Rs. 10000 and he has ITC of Rs. 9800 in the
same month, the e-portal would not allow it to file GSTR-3B unless he pays Rs.
200 before filing GSTR-3B and thereby it would result in payment of interest on
Rs. 10000 instead of Rs. 200, which could not have been the case, had the
e-portal been working in accordance with section 39(7) of the CGST Act.
To conclude although only
an interim order is passed in the abovenoted case by the Hon’ble Gujarat HC,
but it is an eye opener for the Government to make sure the implementation of
the e-portals in accordance with the provisions of the law.
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