Kiran Enterprise Vs State of Tripura (Tripura High Court)
Before we formulate our decision in respect of the question whether Section 5 qua Section 29(2) of the Limitation Act would apply for purpose of condoning the delay in filing the petitioner‟s petition under Section 161 of the TSGST Act, let us revisit the provisions of Section 161 of the TSGST Act as reproduced in para-9 of this judgment. Let us highlight the provisions relating to the limitation. It provides that for purpose of any error which is apparent on the face of the record in the decision or the order or the notice or the certificate or any other documents issued by any authority, the said authority can exercise the said power to rectify either on own motion of the said authority or by the officers appointed under TSGST Act or CGST Act or by the affected person, if such action is taken within a period of three months from the date of such decision, or order or notice or certificate or any other documents as the case may be. The first proviso stipulates that no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other documents. The second proviso provides that the said period of six months shall not apply in such cases where the rectification is purely in the nature of correction of clerical or arithmetical error, arising from any accidental slip or omission. It is apparent on the face of the said provision [Section 161 of the TSGST Act] that this is a complete code within itself and it has impliedly excluded the Limitation Act. Thus, what has been observed by the Superintendent of Taxes in the decision communicated by the reply dated 17.12.2019 does not suffer from any infirmity. Moreover, the Limitation Act will not apply automatically unless it is extended to the special statute such as TSGST Act inasmuch as law in this regard is absolutely unambiguous that except in the case of the suit, appeal or application in the court, the limitation of Act will not apply/extend for the local or special statute. Thus, the petitioner‟s contention in respect of the extension of the Limitation Act stands dismissed. That apart, in the considered view of this court, the rectification as sought is not covered by Section 161 of the TSGST Act.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
By means of this petition filed under Article 226 of the Constitution of India, the petitioner, which is a sole proprietorship firm, has challenged fundamentally two orders being the order dated 15.11.2018 [Annnexure-4 to the writ petition] and the decision contained in the communication dated 17.12.2019 [Annexure-6 to the writ petition]. In addition, it has been urged by the petitioner that the defects/errors manifest in the showcause notice dated 10.10.2018 [Annexure-2 to the writ petition] render the same unsustainable. The petitioner is the distributer of Airtel as engaged by Bharati Hexacom Limited for Dharmanagar jurisdiction. This fact, however, is not under dispute. It is also not in dispute that in terms of Clause-5.7 of the agreement dated 30.10.2010 by which the petitioner has been engaged as the distributor, the petitioner is under obligation for making payment of all taxes, duties, levies, cess, search charge or any other charges that may be applicable on the distributor or for prepaid/service offerings/ products etc. According to the petitioner, the tax invoices used to be prepared by Bharati Hexacom Limited in the name of M/s New Kiran Enterprise, another proprietorship firm owned by the petitioner. On 04.09.2012, when a search was carried out under Section 67(2) of Tripura State Goods and Services Act, 2017 [TSGST Act, 2017 in short] it revealed from GSTTR-3B for the period from July, 2017 to 31st March, 2018 that the taxpayer namely M/s Kiran Enterprise GSTTIN 16ACIPD2157R2Z9 Nayapara Road Dharmanagar has utilized or availed IGST at Rs.3,690.00, CGST at Rs.12,67,409.84 and SGST at Rs.12,67,409.84 but as per Form GSTR-2A (inward supply), the taxpayer is entitled for utilization Input Tax Credit (ITC) against its liabilities at Rs.2,67,307.94 as CGST and Rs. 2,67,307.94 as SGST only, but the tax payer had been found to have wrongly utilized excess ITC at Rs.3,690.00 as IGST, Rs.10,00,101.90 (Rs.12,67,409.84-Rs.2,67,307.94) as CGST and Rs.10,00,101.90 (Rs.12,67,409.84-Rs.2,67,307.94) as SGST.
2. By the order of seizure dated 04.09.2018 tax invoices were seized in presence of witnesses by the Superintendent of State Tax, Dharmanagar charge. For purpose of seizure, due authorization was issued by the competent authority under Section 67(1) of TSGST Act. At the time of seizure, one Ajit Kumar Deb, son of the proprietor was present. As it appeared that the petitioner has committed offence under Clauses-(c) and (d) of Section 12 (2) of TSGST Act, a notice under Section 74(1) of the TSGST Act was issued to the petitioner to showcause as to why the amount of Rs.20,03,893.80 along with interest payable thereon and penalty equivalent to the tax as computed under Section 74(1) of the TSGST Act and why further penal action should not be taken under Clause (e) of Section 122(3) of TSGST Act for availing or utilizing wrongful Input Tax Credit (ITC) to the extent of Rs.20,03,893.80 (Rs.3690.00 +10,101.90 + Rs.10,101.90) by way of suppression of facts for evading tax and for having supplied taxable goods without issuance of tax invoices as required under Section 31(1) of the TSGST Act. The detailed break-up of such evasion has been shown in a table.
3. The sole proprietor by filing a reply has stated that she has two sole proprietorship firms namely M/s Kiran Enterprise and M/s New Kiran Enterprise which deal in the same products and their PAN number is also same. Only the GST number is separate. She has categorically made the following statement :
“As per your notice excess ITC claimed will be adjusted by our Auditor and it is under process. I also submit the annual return also. ”
4. On such premises, it was urged that no penal action be taken under Clause (c) of Section 122(3) of TGST Act. The said reply dated 15.10.2018 [Annexure-3 to the writ petition] was considered by the Superintendent of the State Tax, Dharmanagar Charge the respondent No.4 herein and he passed the order dated 15.11.2018 [Annexure-4 to the writ petition] and that order has been challenged in this writ petition. By the order dated 15.11.2014 the respondent No.4 has observed as follows :
“The taxpayer submitted with her application dated 15.10.2018 M/S Kiran Enterprise & New Kiran Enterprise deals in same products and PAN number is also same. Only GST number is separate. M/S Kiran Enterprise, GSTIN: 16ACIPD2157R2Z9, Nayapara Road, Dharmanagar and M/S New Kiran Enterprise, GSTIN: 16ACIPD2157R1ZA, Nayapara Road, Dharmanagar are separate entity and it should be treated as distinct persons though the proprietor and PAN is same as per provisions of sub-section (4) of Section 25 of the TSGST Act, 2017 as reproduced by the provisions of Section 25(4) of the Act;
”A person who has obtained or is required to obtain more than one registration, whether in one State or Union Territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purpose of this Act.”
Therefore, the taxpayer cannot utilize or avail of Input Tax Credit (ITC) of M/S New Kiran Enterprise, GSTIN: 16ACIPD2157R1ZA against M/S Kiran Enterprise, GSTIN : 16ACIPD2157R2Z9 though both the distinct persons PAN is same.
In respect of excess ITC claimed, the taxpayer is also submitted an application dated 15/10/2018, it will be adjusted by their Auditor and it is under process but it appears from the GST Portal that the taxpayer namely M/S Kiran Enterprise, GSTIN: 16ACIPD2157R2Z9 did not reverse the ITC.
Therefore, it is evidently proved that the taxpayer M/S Kiran Enterprise, Nayapara Road, Dharmanagar wrongly availed or utilized input tax credit an amount of Rs. 3,690.00 as IGST, Rs.10,00,101.90 (Rs.12,67,409.84 – Rs.2,67,307.94) as CGST and Rs.10,00,101.90 (Rs.12,67,409.84 –Rs.2,67,307.94) as SGST. Totally wrongly availed or utilized input tax credit an amount of Rs.20,03,893.80 (Rs.3690.00 + Rs.10,00,101.90 + Rs.10,00,101.90).”
In view of what has been observed in the order dated 15.11.2018 [Annexure-4 to the writ petition], the respondent No.4 has imposed penalty in the manner as under :
“It is crystal clear that the tax payer willingly and knowingly committed offences under clauses (c) & (d) of sub-section (2) of Section 16 of the TSGST Act, 2017 to evade tax and hence liable to penalty an amount equivalent to tax, in addition to tax payable along with interest thereon under Section 74(1) of the TSGST Act, 2017.
In view of the above fact and circumstances, in addition to tax payable, I impose penalty equivalent to the amount of tax along with interest payable thereon under Section 74(1) of the TSGST Act, 2017.
And thus the case is completed as under :
Computation
