Best Agrolife Limited Vs State of Maharashtra (Bombay High Court)
Summary: The Bombay High Court considered a challenge by Best Agrolife Limited to a notice dated 25/03/2025 issued by respondent No.4 directing payment of tax and interest within seven days, failing which recovery proceedings under Section 79 of the Maharashtra Goods and Services Tax (MGST) Act, 2017 would be initiated.
The petitioner did not make payment pursuant to the notice. Instead, through an email dated 11/04/2025, it explained that it had issued credit notes under Section 34 of the CGST Act, 2017 read with Rule 53 of the CGST Rules, 2017 in respect of returned goods and rate differences. According to the petitioner, the credit notes were declared through the e-invoice portal and the corresponding outward tax liability was adjusted against sales effected during previous months/financial years. It contended that this reduced its output tax liability but did not result in any short payment of tax because the liability had ultimately been discharged.
The petitioner further stated that it had furnished a “Tax Liability Report” generated through the GSTN Portal for April 2022 to February 2025, containing remarks against the relevant months reflecting “negative sales”. It also furnished a “NEGATIVE LIABILITY STATEMENT” generated through the common portal for 01/09/2024 to 27/03/2025. According to the petitioner, negative liability in a tax period in which no amount was payable was maintained on the GST Portal and automatically adjusted against subsequent tax-period liability. The petitioner referred to the changes introduced through Notification No. 12/2024 – Central Tax dated 10/07/2024, contending that the reporting facility from September 2024 onwards was intended to streamline reconciliation.
