When Department directs payment of interest at rate of 18 percent per annum on delayed payment of tax but later on same is get reduced by Department without adducing any reason and there is also a question that whether interest is payable on ITC and if said issues are explained by Department then assessee would prefer a statutory appeal rather than preferring a writ petition.

Mr.Muthuvenkataraman, learned counsel on record for writ petitioner is before this Court and Mr.V.Sundareswaran, learned senior panel counsel (GST), who had accepted notice on behalf of respondents 1 and 2 yesterday, is before this Court.

2. To be noted, the third respondent is Indian Overseas Bank and considering the nature of the matter, the third respondent is only in the nature of a Garnishee. Therefore, it will suffice if the order (which this Court shall now be passing in this writ petition) is communicated to the third respondent by the Registry. In other words, third respondent is only a formal party and is not an adversary in this lis.

3. In the aforesaid backdrop, with the consent of aforesaid learned counsel on both sides, the main writ petition itself is taken up, heard out and disposed of.

4. To be noted, this writ petition is listed in the motion list today after Revenue counsel accepted notice yesterday. Revenue counsel, who accepted notice yesterday, obtained instructions and made submissions today.

5.Short facts shorn off needless particulars and details are as follows:

a) the writ petitioner is registered qua 'Goods and Services Tax'('GST' for brevity) and writ petitioner is engaged in the business of manufacturing automotive parts, namely pressing and welding components;

b) Therefore, 'The Central Goods and Services Act, 2017 (Act 32 of 2018)', hereinafter 'CGST' for brevity is the statute out of which the instant writ petition arises;

c) The writ petitioner is taking 'Input Tax Credit' (ITC) as and when applicable based on the invoices and other documents as described under law;

d) The writ petitioner is also filing returns on a monthly basis;

e) It is the writ petitioner's case that it is entitled and eligible to utilize input tax credit availed towards the tax and writ petitioner is liable to pay output tax liability;

f) It is not in dispute that the writ petitioner was unable to pay their entire taxes due in cash on the due date and therefore, the writ petitioner became liable to pay interest.

6. In the aforesaid scenario, writ petitioner was visited with a communication dated 14.03.2019 being communication No.50 of 2019 from the first respondent. This communication refers to Section 50 of CGST Act and directs payment of interest at the rate of 18% per annum on delayed payment of tax for the period from July 2017 to November 2018. To be noted, this period, if stated with specificity, would essentially means 01.07.2017 to 30.11.2018. Though the financial year is from April of previous calender year to March of next calender year, in the instant case, GST regime kicked in only on 01.07.2017 and therefore, the period is stated with specificity as above.

7. To this, the writ petitioner responded vide letter dated 29.03.2019 inter alia contending that the writ petitioner could not pay the cash component within the due date owing to one of their customers delaying payment on a regular basis. Besides, it was contended that ITC credit for every month is nearly 73% and writ petitioner has adjusted the same against total GST payable and worked out the interest on the balance cash component. To be noted, a work sheet/computation was annexed to this communication dated 29.03.2019.

8. To put in simple terms, the pointed question that emerges is 'whether the writ petitioner is liable to pay interest for ITC also?'.

9. Be that as it may, post 29.03.2019 communication from the writ petitioner, Office of the Superintendent of Central Tax sent a communication calling upon the writ petitioner to pay Rs. 1,00,91,755/-. This was followed by a communication dated 23.05.2019 bearing reference C.No.IV/16/30/2019-Tech-III from the second respondent to the third respondent banker inter alia calling upon the third respondent bank to make payment in pursuance of the aforesaid demand.

10. It is not in dispute that the third respondent bank is writ petitioner's banker and writ petitioner's bank account is with the third respondent bank. To be noted, this communication dated 23.05.2019 bearing reference C.No.IV/16/30/2019-Tech-III (hereinafter be referred to as 'impugned communication') is inter alia under Section 79 of Çentral Goods and Services Tax Act' ('CGST Act'' for brevity).

11. Learned counsel for writ petitioner submitted that the original payment was Rs.1,70,71,048.31 and after writ petitioner's letter dated 29.03.2019, the Department had reduced it to Rs.1,00,91,755 vide a communication to writ petitioner dated 22.05.2019, but no reasons whatsoever have been adduced therein as to how the sum originally demanded has been brought down. Responding to the above and adverting to the communication, learned Revenue counsel submitted that the communication dated 22.05.2019 is for the period from 01.07.2017 to 31.03.2018, whereas the original demand was for the period from 01.07.2017 to 30.11.2018 as mentioned supra. However, no reason has been articulated in this regard though there is a table in the communication dated 22.05.2019.

12. More importantly, no reason has been adduced as to why the demand is now for a shorter period. To be noted, the impugned letter to the bank i.e., third respondent, also specifies only the lesser figure referred to supra. In the aforesaid backdrop, learned Revenue counsel pressed into service an order made by a Hon'ble Division Bench of the High Court of Telangana at Hyderabad being order dated 18.04.2019 made in W.P.No.44517 of 2018 in Megha Engineering & Infrastructure Ltd., Vs. The Commissioner of Central Tax and others.

13. Adverting to the aforesaid order, learned Revenue counsel contended that imposition of interest under Section 50 is automatic. Learned revenue counsel also drew the attention of this Court to sub- section (12) of Section 75 of CGST Act and contended that in cases of self- assessed tax, the moment the amount of tax remains unpaid, levy of interest is automatic and the same has to be paid. A perusal of Section 75 of CGST Act reveals that there is a non-obstante clause therein, qua preceding sections 73 and 74 which deal with determination of short payment, non-payment etc.,

14. However, the aforesaid communication dated 22.05.2019 from the Office of the Superintendent of Central Tax is the basis for the impugned communication, but the aforesaid communication does not spell out the basis on which the demand has been brought down from little over Rs.1.70 crores to Rs.1.09 Crores. More importantly, the communication does not say anything about whether the writ petitioner is liable to pay interest on ITC. Even if the submission of Revenue counsel that the communication dated 22.05.2019 pertains to a shorten period, the question as to whether the writ petitioner is liable to pay interest qua ITC has not been met though it has been specifically raised by the writ petitioner. Both sides submit that they are unable to say with certainty as to whether the aforementioned Megha Engineering & Infrastructure Ltd rendered by a Hon'ble Division Bench of High Court of Telangana has been carried to the Hon'ble Supreme Court. In the aforesaid circumstances, considering the factual matrix of this case, this Court deems it appropriate to leave open the question as to whether Megha Engineering & Infrastructure Ltd case would apply to instant case.

15. This is more so as learned counsel for writ petitioner submits that if the Department is called upon to send a communication explaining the reduction in the sum as well as the issue as to whether interest is payable on ITC, writ petitioner will avail a statutory appellate remedy against such an order. In this regard, learned counsel for writ petitioner drew the attention of this Court to Section 107 of CGST Act and submitted that if the respondents are called upon to send a reply explaining the aforesaid two aspects and if it is not in favour of the writ petitioner assessee, the writ petitioner assessee will avail alternate remedy under Section 107 of CGST act.

16. In the light of narrative thus far, the following order is passed:

a) Writ petitioner undertakes to pay the admitted liability of Rs.229,014,673/- (as admitted in petitioner's aforementioned letter dated 29.03.2019 to the Department within one week from today i.e., on or before 20.06.2019).

b) On payment of aforesaid amount on or before 20.06.2019, the impugned communication dated 23.05.2019 bearing reference C.No.IV/16/30/2019-Tech-III from the second respondent to the third respondent bank will stand set aside.

c) If the aforesaid payment is not made on or before 20.06.2019, this writ petition will stand dismissed and the impugned order will continue to operate without any reference to this Court.

d) On payment of aforesaid amount on or before 20.06.2019 by the writ petitioner, as mentioned supra, impugned communication from the second respondent to third respondent bank inter-alia under Section 79 of CGST Act will stand set aside and the second respondent shall consider all the points raised in writ petitioner's reply dated 29.03.2019, more particularly the annexed working sheet, pass an order in a manner known to law and communicate the same to the writ petitioner under due acknowledgement within one week therefrom.

e) If the decision taken by the second respondent is in favour of the writ petitioner, it is the end of the matter. If that not be so, as mentioned supra, writ petitioner shall avail alternate remedy of preferring a statutory appeal to the appellate Authority under Section 107 of CGST Act.

This writ is disposed of with the above directions. No costs.

Consequently, the connected miscellaneous petitions are closed.