Ranjan Sarkar Vs Assistant Commissioner of State Tax (Calcutta High Court)
In a landmark decision that brings significant relief to taxpayers, the Calcutta High Court, Circuit Bench at Jalpaiguri, has ruled in favor of the taxpayer in the case of Ranjan Sarkar Vs Assistant Commissioner of State Tax. The court addressed the issue of wrongful availment of Input Tax Credit (ITC) and its reversal, particularly when the credit was availed but not utilized. This judgment underscores a critical aspect of the Goods and Services Tax (GST) regime, touching upon the implications of interest on reversed ITC.
Analysis
The case centered on whether interest under Section 50(3) of the West Bengal Goods and Service Tax Act 2017 can be levied in instances of incorrect availment of ITC and its subsequent reversal. The court’s decision was influenced by Circular No. 192/04/2023 – GST, dated 17.7.2023, and several judgments from various High Courts, including Madras and Punjab & Haryana, as well as a specific order in the case of M/s. Larsen & Toubro Limited vs. State of West Bengal & Ors.
The respondents acknowledged an amendment made in the Finance Act, 2022, to Section 50(3), applied retrospectively from July 1, 2017. This amendment specifies that taxpayers who have availed and reversed ITC but have not utilized it are not required to pay interest. The High Court, taking note of these developments and precedents, ruled that no interest is payable under the given circumstances.
Comments are closed.