Interest & Penalty on wrongly availed ITC, but not utilized:

 

M/s Aathi Hotel vs. Assistant Commissioner (ST), 2021

In the instance case, the petitioner challenged the leavy of interest and penalty for wrongly availed ITC , but not utilized for discharging for any output liability. The Madras High Court dealt with the wrongful availment of ITC where credit was availed but not utilised. The core issue revolved around whether interest and penalty could be levied on ITC wrongly availed but not utilised. The court ruled in favour of the taxpayer, stating that neither interest nor penalty was payable.