GSTN to ensure prompt credit & debit entries in real time : Allahabad HC


GSTN to ensure prompt credit & debit entries in real time : Allahabad HC


In a recent case involving Bhole Baba Milk Food Industries Limited vs. Union of India, the Allahabad High Court addressed the issue of levying penalties for delayed credit of payments to GSTN accounts. The petitioner sought relief from penalties and interest charged for alleged non-filing of returns due to delayed bank transactions.

The Allahabad High Court ruled that the imposition of a penalty for the alleged non-filing of a monthly return for April 2023 is unjustified, considering the assessee had initiated tax payment on time, which was debited from their account.

It was found that the delay in payment was not the fault of the assessee, as they had completed the necessary procedures, including generating a corporate e-payment challan that was approved by the bank, but was not processed as per the GSTN’s records.The court clarified that penalties for late filing (under Section 47)  and interest (Section 50) under U.P. GST Act, 2017 may arise only in the event of “failure” on the part of an assessee to file a return and/ or payment of due tax within time.

The court recommended that the GST Network (GSTN) and the Bank to device a better mechanism to ensure prompt credit and debit entries to arise in real time as may not create any doubts or disputes in future.

The court ordered that the penalty of about Rs.1,07,710.51/- and interest Rs.100/- deposited by the petitioner under protest may be adjusted against the tax liability for the month of April, 2024 onwards without incurring any liability as to interest on that amount.


The copy of the order is as under:


WTAX(A)_1431_2023 (1)

Krishnakant Jakhotia
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