The Hon'ble High Court of Calcutta in W.P.A. No. 15304 Cart Infralog Ltd. v. Assistant Commissioner of CGST & CX dated JULY 29, 2024 held that where an adjudication order was passed under section 73(9) for availing Input Tax Credit (ITC) by filing GSTR-3B after the last date, the assessee should be allowed interim protection against coercive action in light of proposed amendments to section 16(4) in Finance Bill No. 2 of 2024.
Facts of the Case:
The petitioner, Cart Infralog Ltd., challenged an adjudication order passed under Section 73(9) of the CGST/WBGST Act, 2017 dated April 29, 2024, issued in Form GST/DRC 07. The show cause notice dated August 23, 2023, indicated that the claim of ITC on the basis of returns furnished by the petitioner under Section 39(1) of the Act for Rs. 368/-, Rs. 3,163,873/- & Rs. 3,163,873/- under IGST, CGST & SGST respectively, were found reversible.
The reason for reversal was that the ITC availed in GSTR-3B was filed after the last date prescribed under Section 16(4) of the Act. While the last date for filing GSTR-3B was October 20, 2019, the petitioner filed it on October 31, 2019, for the months December 2018 to March 2019.
The petitioner relied on Finance Bill No. 2, 2024 (Bill No. 55 of 2024), introduced in the Lok Sabha. Clause 114 of this bill proposes an amendment to Section 16(4) of the Act, allowing registered persons to benefit from ITC in any return filed under Section 39 up to November 30, 2021, for financial years 2017-18 to 2020-21.
Issue:
Whether the assessee should be granted interim protection against coercive action based on the proposed amendment in Finance Bill No. 2 of 2024, despite filing GSTR-3B after the prescribed last date?
Held:
The Hon'ble High Court of Calcutta in W.P.A. No. 15304 held that:
The Court observed that the show cause notice had found a sum of Rs. 63,28,114/- to be reversible due to the petitioner availing ITC by filing GSTR-3B after the last date. However, the Court took note of Finance Bill No. 2 of 2024 (Bill No. 55 of 2024), which proposed an amendment to Section 16 of the Act. This amendment aimed to benefit registered taxpayers who had filed returns under Section 39 up to November 30, 2021, for financial years 2017-18 to 2020-21.
The Court opined that since the petitioner had filed Form GSTR-3B for the tax period 2018-2019 belatedly but before November 30, 2021, they were entitled to an interim order. The Court reasoned that the proposed Finance Bill takes care of a major part of the determination made under Section 73 of the Act for the Financial Year 2018-19, and such an interim order was necessary to avoid multiplicity of judicial proceedings.
Considering that the Finance Bill was yet to become an Act of Parliament, the Court held it prudent to direct the petitioner to secure at least a part of the determined amount. Thus, the Court ordered the petitioner to deposit Rs. 25 lakhs with the Registrar General within three weeks. This amount was to be invested in an interest-bearing fixed deposit account with a Nationalized Bank until further orders.
The Court issued an unconditional order restraining the respondents from taking any coercive steps against the petitioner in connection with the enforcement of the order passed under Section 73 of the Act dated April 29, 2024. This interim protection was granted for three weeks, with the provision that if the petitioner complied with the deposit directive, the interim order would continue until the end of September 2024 or until further orders, whichever was earlier.
The Court also allowed the parties to exchange affidavits and granted liberty to mention for inclusion, ensuring that both parties had the opportunity to present their cases fully as the matter progressed.
Relevant Sections:
1. Section 73(9) of Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017
2. Section 16(4) of Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017
3. Section 39 of Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017
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