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Case Law Details

Case Name : Larsen & Toubro Limited Vs State of West Bengal & Ors. (Calcutta High Court)
Appeal Number : WPA 2654 of 2020
Date of Judgement/Order : 13/12/2022
Related Assessment Year :

Larsen & Toubro Limited Vs State of West Bengal & Ors. (Calcutta High Court)

Introduction: The case of Larsen & Toubro Limited Vs State of West Bengal & Ors., heard by the Calcutta High Court, involves a dispute concerning the imposition of interest under Section 50 of the WBGST Act, 2017. This article delves into the details of the case and the court’s ruling on the matter.

Detailed Analysis: The petitioner, Larsen & Toubro Limited, challenged a communication dated May 2, 2018, wherein they were asked to pay interest under Section 50 of the WBGST Act, 2017. The basis for the interest claim was the alleged wrongful claim of Input Tax Credit (ITC) amounting to Rs. 18,36,39,830/-. However, the petitioner contended that they had not utilized the ITC and had reversed the same, thereby negating their liability for interest payment.

The petitioner argued that, according to the amended provisions of Section 50(3) of the WBGST Act, 2017, they were not liable to pay interest retrospectively from July 1, 2017, if the ITC had not been utilized.

Upon consideration of the submissions and legal provisions, the Calcutta High Court ruled in favor of the petitioner. The court noted that since the ITC had not been utilized and had been reversed, the petitioner was not liable to pay interest as per the impugned communication. The court also emphasized the significance of the amended provisions of Section 50(3) of the WBGST Act, 2017, in reaching its decision.

Conclusion: The judgment in Larsen & Toubro Limited Vs State of West Bengal & Ors. provides clarity on the liability for interest under the WBGST Act, 2017, in cases where Input Tax Credit has not been utilized and has been reversed. The ruling underscores the importance of adherence to legal provisions and fair treatment of taxpayers in GST matters.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

Heard learned advocates appearing for the parties.

By this writ petition petitioner has challenged the impugned communication dated 2nd May, 2018 being annexure P/5 to the writ petition by which the petitioner has been asked to pay interest as per Section 50 of the WBGST Act, 2017 on the ground that the petitioner has wrongly claimed ITC under the WBGST Act, 2017 of an amount of Rs. 18,36,39,830/- and in the same communication it has been recorded that petitioner has made payment voluntarily in DRC 3 for the said amount as per provisions of Section73(5) of the WBGST Act, 2017.

Petitioner submits that the criteria for claiming interest is that petitioner must have claimed ITC wrongly and must have utilized the same.

In the present case admittedly it has not been utilized and it has been reversed and as such petitioner is not liable to pay interest in view of the amended provisions of Section 50 sub-section (3) of the said Act substituted by Finance Act, 2022 with retrospective effect from 1st July, 2017.

Considering the facts and circumstances of this case and legal position and submission of the parties and particularly taking into consideration the substituted provisions of Section 50(3) of the WBGST/CGST Act, 2017, I am of the considered view that the petitioner is not liable to pay interest as per impugned communication dated 2nd May, 2018 and as per the view taken by this Court, all legal consequences will follow.

In view of the discussion and observation made above this writ petition being WPA 2654 of 2020 stands disposed of.

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