Hemraj Rice Mill & Anr. Vs Assistant Commissioner (Calcutta High Court)
The Calcutta High Court, in its recent judgment (June 16, 2025) in the case of Hemraj Rice Mill & Anr. Vs. The Assistant Commissioner, CGST & CX, has delivered a significant ruling reinforcing the critical importance of procedural compliance by tax authorities, particularly concerning Input Tax Credit (ITC) reversals under GST. This decision, available as 2025 Taxo.online 1186, is a must-know for all tax professionals and businesses.
Case Background: The petitioner, Hemraj Rice Mill, challenged an appellate order and demand for tax periods 2017-18 to 2018-19. The authorities had concluded that the petitioner failed to reverse ITC of ₹55,11,115, as required by Section 17(2) of the CGST Act read with Rules 42 and 43.
The Core Issue: The central contention was that the adjudicating authority had failed to apply the statutory formulae prescribed under Rules 42 and 43 while determining the ITC disallowance. While the appellate authority acknowledged this procedural lapse, it still dismissed the petitioner’s appeal, citing the petitioner’s failure to furnish a reconciliation statement.
The key legal question before the High Court was whether the denial of ITC was sustainable in law given the authorities’ failure to follow the prescribed computational methodology, and whether the petitioner should have been given an opportunity to submit reconciliation statements
