The Madras High Court, while permitting the Writ Petition, has stated that the GST Department could be demanded interest only on the cash component of the tax remitted with delay, but not on ITC available. The judgment was passed by Dr. Justice Anita Sumanth, bench member, regarding the case between M/s. Refex Industries Limited Vs. The Assistant Commissioner of CGST and Central Excise.
In this case, the petitioners have in fact filed Returns of income even with some delay for the financial year 2017-18. The respondent then calculated the delay in filing of GST Returns 
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After that, The candidates questioned it by stating that they had sufficient Input Tax Credit (ITC) available to the Department, so interest could be requested, if at all, only on the cash component of the tax remitted with some delay (belatedly). The proceedings for coercive recovery of the interest are revised in the present Writ Petitions.
The particular inquiry reached to the gate of the court is as to whether the credit is due to an assessee, payment by the method of adjustment can still be termed ‘belated’ or ‘delayed’. Meanwhile, The word ‘delayed’ here stands for a situation of deprival, in which the State has been deprived of the funds representing the tax component till such time the Return is filed combined by the settlement of tax.
Whereas, the availability of Input Tax Credit (ITC) 
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For the final decision, The court considered the proper application of Section 50, that is one where the interest is levied on overdue cash payment, however, not on ITC available at the same time with the Department to the credit of the assessee.
In the same, the Madras HC also observed that As per Section 50(1) of the CGST Act interest will be collected only on that part of the tax which is paid in cash, has been combined with effect from 01.08.2019, but clearly need correction in an anomaly in the provision as it existed even before such inclusion. It needs to be read as clarificatory and operative retrospectively.
