Case Law Details
Varshini Lift Tech And Earth Movers Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
Karnataka High Court held that virtue of insertion made vide Finance (No.2) Act, 2024, which has retrospective amendment from 01.07.2017, input tax credit (ITC) in respect of the financial year 2017-18, 2018-19, 2019-20, 2020-21 allowed if the return is filed up to 30th November 2021.
Facts- The petitioner is a proprietory concern engaged in the services of, inter alia, manpower supply along with essential equipment services, etc. The petitioner was issued with a show-cause notice dated 21.12.2023 u/s. 73(1) of the Karnataka Goods and Services Tax, 2017 consequent to which the petitioner submitted its reply. Thereafter an order u/s. 73(9) of the KGST Act was passed vide order dated 27.03.2024 whereunder the tax demand together with interest and penalty was made against the petitioner.
Being aggrieved, the petitioner preferred an appeal u/s. 107 of the KGST on 31.07.2024. Along with the appeal and an application for condonation of delay was also filed. The respondent No.3 vide order dated 08.08.2024 dismissed the appeal at the stage of admission itself on the ground that the delay in filing the appeal is not liable to be condoned u/s. 107(4) of the KGST Act. Thereafter, the present writ petition is filed.
Conclusion- Held that by virtue of insertion made vide Finance (No.2) Act, 2024, which has retrospective amendment from 01.07.2017, Section 16(5) of the KGST has been inserted which entitles the assessee to claim the input tax credit in respect of the financial year 2017-18, 2018-19, 2019-20, 202021 if the return is filed up to 30th November 2021. Thus, held that under the peculiar facts and circumstances of the present case, relief sought for by the petitioner is liable to be granted in terms of the orders passed in the case of M/s. Sadhana Enviro Engineering Services.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The present writ petition is filed seeking for the following relief:
“(i) Quashing the impugned Appellate Order dated 08.08.2024 bearing no. KGST/AP-372/2024-25 passed by the 3rd Respondent under Section 107 of the Karnataka Goods and Services Tax Act, 2017 for the subject tax period 2018-19 (Annexure-‘A’).
(ii) Restoring the appeal of the Petitioner in Form GST APL-01 dated 31-07-2024 on the file of the 3rd Respondent (Annexure-N1) and directing the 3rd respondent to hear, consider and dispose off the said appeal of the petitioner on merits and in accordance with law;
(ii) Pass such order or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity.
(iv) Quashing order dated 27.03.2024 passed by respondent no.1 bearing No.ACCT(Audit)-2/HPT/GST-ADJN/Order-2023/24/t for F.Y.2018-19 (Annexure – L1).”
2. The relevant facts situation in nutshell leading to the present petition are that the petitioner is a proprietory concern engaged in the services of, inter alia, manpower supply along with essential equipment services, etc. The petitioner was issued with a show-cause notice dated 21.12.2023 (Annexure-G to the writ petition) under Section 73(1) of the Karnataka Goods and Services Tax, 20171 consequent to which the petitioner submitted its reply. Thereafter an order under Section 73(9) of the KGST Act was passed vide order dated 27.03.2024 (Annexure-L1 to the writ petition) whereunder the tax demand together with interest and penalty was made against the petitioner. Being aggrieved, the petitioner preferred an appeal under Section 107 of the KGST on 31.07.2024. Along with the appeal and an application for condonation of delay was also filed. The respondent No.3 vide order dated 08.08.2024 dismissed the appeal at the stage of admission itself on the ground that the delay in filing the appeal is not liable to be condoned under Section 107(4) of the KGST Act. Thereafter, the present writ petition is filed.
3. Heard the submissions of the learned counsel Sri. Sandeep Huilgol and learned AGA Sri. Shivaprabhu Hiremath for the respondents.
4. It is the contention of the petitioner that under Section 16(4) of the KGST, a person was entitled to take input tax credit in respect of invoices or debit notes for supply of goods on or before 30th of November, following the end of financial year to which such invoice or debit note pertains to. However, it is contended that by virtue of insertion made vide Finance (No.2) Act, 2024, which has retrospective amendment from 01.07.2017, Section 16(5) of the KGST has been inserted which entitles the assessee to claim the input tax credit in respect of the financial year 2017-18, 2018-19, 2019-20, 202021 if the return is filed up to 30th November 2021. It is further contended that the returns claiming the input tax credit having admittedly been filed before the 30th November, 2021, the same is required to be taken into consideration in the adjudication of the show-cause notice dated 21.12.2023 in respect of which the order dated 27.03.2024 has been passed.
5. In support of the said contentions, the learned counsel for the petitioner relies on the judgment of a Coordinate Bench of this Court in the case of M/s. Sadhana Enviro Engineering Services v. The Joint Commissioner of Central Tax and others2. It is further contended that although in the writ petition various grounds have been urged with regard to the aspect of condonation of delay by the Appellate Authority, having regard to the insertion made vide the Finance (No.2) Act, 2024, the petitioner is entitled to claim the benefit of the said amendment in the adjudication of the show-cause notice dated 21.12.2023. Hence, learned counsel seeks for allowing the writ petition.
6. Per contra, learned AGA submits that the order dated 08.08.2024 passed by respondent No.3 (Annexure-A) is just and proper and the delay in filing the appeal cannot be condoned having regard to the clear wording of Section 107(4) of the KGST. However, the learned AGA does not dispute the proposition that the petitioner is entitled to claim the benefit of Section 16(5) of the KGST, which has been inserted pursuant to the Finance (No.2) Act, 2024.
7. Having regard to the contentions put forth by both the learned counsels, without going into the question as to the correctness or otherwise of the order dated 08.08.2024 (Annexure-A) passed by the Appellate Authority refusing to condone the delay having regard to the order passed in the case of M/s. Sadhana Enviro Engineering Services2, under the peculiar facts and circumstances of the present case, relief sought for by the petitioner is liable to be granted in terms of the orders passed in the case of M/s. Sadhana Enviro Engineering Services2.
8. In view of the aforementioned, the following:
ORDER
i) The writ petition is partly allowed.
ii) The order dated 27.03.2024 bearing No.ACCT (Audit)-2/HPT/GST-ADJN/ORDER-2023/24/T for F.Y.2018-19 (Annexure–L1) passed by respondent No.1 is set aside.
iii) The order dated 08.08.2024 bearing No.KGST/AP-372/2024-25 (Annexure-A) passed by the 3rd respondent is set aside.
iv) The parties are relegated to the stage of the show-cause notice bearing No.ACCT(Audit)-2/HPT/GST-ADJN/DRC-01/2023-24/T dated 21.12.2023 (Annexure-G) and the respondents are directed to grant benefit in terms of Section 16(5) of the KGST by providing sufficient and reasonable opportunity to the petitioner, subject to the petitioner satisfying the respondents regarding its entitlement to credit and proceed further in accordance with law.
v) The petitioner shall appear before the respondent No.1 on 12.12.2024 without requirement of any further notice being issued in this regard and the petitioner shall be entitled to file a further reply to the show cause notice dated 21.12.2023 on the date of his appearance, in addition to the reply already filed by the petitioner.
vi) It shall be open for the petitioner to put forth all contentions available to it under law in response to the said show-cause notice dated 21.12.2024.
Notes:
1 Hereinafter referred to as “KGST”
2 Order dated 03.09.2024 in W.P.No.6138/2020
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