Case Law Details
Cart Infralog Limited & Anr. Vs Assistant Commissioner of CGST & CX.Ballygunge Division & Ors. (Calcutta High Court)
In the case Cart Infralog Limited & Anr. vs. Assistant Commissioner of CGST & CX, the Calcutta High Court granted interim relief to the petitioners regarding an adjudication order passed under Section 73(9) of the CGST/WBGST Act, 2017. The dispute arose from the reversal of Input Tax Credit (ITC) for late filing of GSTR-3B for the tax period December 2018 to March 2019. The petitioners argued that a proposed amendment to Section 16(4) of the Act in the Finance Bill 2024 would allow them to claim ITC on returns filed before November 30, 2021, which could retroactively validate their late filing. While the bill has not yet become law, the court acknowledged the petitioners’ claim and issued an interim order. The petitioners were directed to deposit Rs. 25 lakhs as partial security within three weeks. The court restrained the authorities from taking any coercive action until the end of September 2024, or until further orders, whichever is earlier. Both parties were granted liberty to exchange affidavits for future proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. At the very outset, Mr. Kanodia, learned advocate appearing on behalf of the petitioners would submit that he has instruction not to press Prayer-A and confines the challenge to the other prayers in the writ petition.
2. Challenging an adjudication order passed under Section 73(9) of the CGST/WBGST Act, 2017 dated 29th April, 2024 issued in Form GST/DRC 07, the present writ petition has been filed.
3. Mr. Kanodia, learned advocate submits that it would appear from the show-cause notice dated 23rd August, 2023 that the claim of ITC on the basis of returns furnished by the petitioner no.1 under Section 39(1) of the said Act for Rs.368/-, Rs.3163873/- & Rs.3163873/- under IGST, CGST & SGST respectively, were found reversible since, ITC, availed in GSTR 3B was filed after the last date prescribed under Section 16(4) of the said Act. He submits that although, the last date for filing the GSTR 3B was 20th October, 2019, the said GSTR 3B was filed on 31st October, 2019 for the months December 2018 to March, 2019.
4. By placing before this Court the Finance bill no.2, 2024 bill being bill No.55 of 2024, it is submitted that the said bill as introduced in the Lok Sabha in Clause 114 thereof, a provision has been made by proposing an amendment to Section 16(4) of the said Act, so as to entitle the registered persons under the said Act to benefit of Input Tax Credit in any return filed under Section 39 of the said Act which have been filed up to the 30th of November, 2021 provided the same pertains to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21.
5. It is submitted that though the aforesaid bill is yet to be made an act of Parliament, however, it is more likely than not that the bill would be passed and would become an Act. Once, the bill is passed and becomes an Act, the petitioners shall be entitled to take benefit of ITC worth Rs.63,28,114/-.
6. Mr. Siddiqui, learned Advocate appearing on behalf of the respondents submits that although, the bill has been introduced in the parliament, however, it will take time for the bill to become an Act. He submits that although the aforesaid order is an appealable order and ordinarily this Court ought not to interfere, however if this Court is inclined to admit the writ petition, appropriate protection may be afforded to the respondents.
7. Having heard the learned Advocates appearing for the respective parties and taking note that a sum of Rs. 63,28,114/- was found to be reversible, as would appear from the show cause notice, for reasons of the petitioners having availed ITC by filing GSTR 3B after the last date and since, from the Finance Bill No.02, being Bill No.55 of 2024, it would appear that in Clause 114, amendment of Section 16 of the said Act has been proposed thereby making a provision to give benefit to those registered tax payers who are entitled to Input Tax Credit and have filed a return under Section 39 of the said Act up to 30th November, 2021, in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial years 2017-18, 2018-19, 2019-20 and 2020-21, and since the petitioner had filed Form 3B for the Tax period 2018-2019, belatedly but before 30th November, 2021, I am of the view that the petitioners at this stage is entitled to an interim order, as the finance bill no.2 of 2024 takes care of a major part of the determination made under Section 73 of the said Act for the Financial Year 2018-19. Such interim order is necessary to avoid multiplicity of judicial proceedings.
8. Having regard thereto, but taking note of the fact that the aforesaid Financial bill is yet to become an Act of Parliament, it would be prudent at this stage to direct the petitioners to secure at least a part of the determination already made.
9. In view thereof, the petitioners are directed to make a deposit with the learned Registrar General a sum of Rs.25 lakhs within a period of 3 weeks from date. If the aforesaid amount is deposited with the learned Registrar General, the same shall be invested in any interest bearing fixed deposit account with any Nationalized Bank of his / her choice and the same shall be kept renewed until further order of this Court.
10. There shall be an unconditional order restraining the respondents from taking any coercive steps against the petitioners in connection with enforcement of the order passed under Section 73 of the said Act dated 29th of April, 2024, for a period of three weeks from date. If the petitioners comply with the direction as regards payment as indicated hereinabove, the interim order shall continue till the end of September, 2024 or until further order whichever is earlier.
11. Parties shall be at liberty to exchange affidavits.
12. Liberty to mention for inclusion.
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