M/S. RSB Transmissions India Limited VS Union Of India: Electronic Cash Ledger VS. GSTR-3B: A Taxpayer’s Misconception
This legal case delves into the fascinating world of tax compliance, specifically the clash between M/S. RSB TRANSMISSIONS INDIA LIMITED and the Union of India. At its core, the dispute revolves around the tardiness in filing GSTR-3B returns and the subsequent interest charges imposed by the Revenue Department. RSB, the petitioner, contends that the money it had already stashed in the Electronic Cash Ledger should absolve it from these interest charges. However, the tax authorities have a different perspective.
RSB TRANSMISSIONS INDIA LIMITED is a registered company under the Companies Act 2013. The company faced delays in filing its GSTR-3B returns for various periods, leading to interest charges of Rs. 13,23,783 imposed by the Revenue Department in July 2021.
To address this, RSB belatedly deposited Rs. 2,32,77,535 in cash and paid an additional Rs. 1,53,260 as interest under Section 50 of the CGST Act in August 2022. However, the department insisted on RSB paying the remaining interest of Rs. 11,72,523.
The Key Issue:
The central question in this case is whether a taxpayer can clear their tax liability by depositing money in the Electronic Cash Ledger before filing the GSTR-3B return.
RSB seeks to overturn the department’s rejection of its request for a refund of the Rs. 11,70,523 interest collected under Section 50 of the CGST Act, claiming that it had already deposited the amount with the government before the due date. They emphasize the importance of understanding this concept.
On the other side, the department contends that there were no technical issues with the GSTR-3B filings for the relevant periods and that RSB failed to timely inform the jurisdictional officer or GSTIN help desk of any problems. They assert that merely depositing money into the Electronic Cash Ledger does not constitute tax payment to the government.
The High Court examined the case and concluded that RSB’s belief that the Electronic Cash Ledger deposit alone could discharge its tax liability was mistaken. According to the court, the tax liability is only discharged when the GSTR-3B return is filed on the due date.
RSB had indeed filed the returns late for the mentioned periods, resulting in the rightful imposition of interest by the Revenue Department. RSB had already paid this interest through Form DRC-03, so there was no need for a refund.
This case underscores the importance of understanding the nuances of tax compliance. Depositing money into the Electronic Cash Ledger is not the end of a taxpayer’s responsibility; timely filing of GSTR-3B returns is the key to discharging tax liability. Ignorance of the law is not a valid excuse to evade penalties or interest under the tax law.