Case Law Details
Harsh Khanna and Sons HUF Vs Assistant Commissioner (Delhi High Court)
Delhi High Court, in the case of M/s Harsh Khanna and Sons HUF vs. Assistant Commissioner, has declined to entertain a writ petition challenging an order denying Input Tax Credit (ITC) due to belated filing of GSTR-3B returns. The Court directed the assessee to pursue the statutory appellate remedy available under Section 107 of the Central Goods and Service Tax Act, 2017 (CGST Act).
The petitioner, M/s Harsh Khanna and Sons HUF, had approached the High Court under Articles 226 and 227 of the Constitution of India, seeking to quash a Show Cause Notice dated November 27, 2024, and a subsequent Order-in-Original dated February 25, 2025. The impugned order raised a demand of Rs. 70,45,630/- for ITC availed by the petitioner, citing violations of Sections 16(4), 16(5), and 16(6) of the CGST Act. Additionally, the order imposed interest of Rs. 2,01,218/- for delayed GSTR-3B filings for the FY 2020-21 and a penalty of Rs. 7,04,563/- for wrong availment of ITC.
The core of the dispute revolved around the petitioner’s GSTR-3B returns for the financial year 2020-21, which were due by November 30, 2021, but were filed on December 14, 2021. This 14-day delay led the Assistant Commissioner to disallow the ITC, as Section 16(5) of the CGST Act sets a deadline of November 30 for filing returns to avail ITC.
During the proceedings before the Assistant Commissioner, the petitioner failed to file a reply to the Show Cause Notice or appear for the personal hearings, which resulted in the passing of the ex-parte impugned order.
Counsel for the petitioner, Mr. Akhil Krishan Maggu, argued that the 14-day delay in filing ought to be condoned, especially since late payment charges had already been deposited.
The Delhi High Court, however, observed that the issues concerning the effect of non-filing of returns within the prescribed period and any deficiencies pointed out by a memo were factual aspects requiring appreciation by an appellate authority. The Court noted that the impugned order was appealable under Section 107 of the CGST Act.
Acknowledging the petitioner’s difficulty due to the lack of documents on record as no reply was filed, the Court permitted the petitioner to avail the appellate remedy. The High Court stipulated that the petitioner could file any documents they relied upon to support their case before the Appellate Authority. Furthermore, the Court directed the Appellate Authority to consider the matter on its merits and not dismiss the appeal on the grounds of limitation, provided the appeal was filed within 45 days along with the requisite pre-deposit.
The petition was accordingly disposed of, with the High Court emphasizing the availability of a statutory appellate mechanism for addressing such factual and legal contentions related to GST compliance.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
CM APPL. 25472/2025 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
W. P.(C) 5582/2025 & CM APPL. 25471/2025 (for stay)
3. The present petition has been filed by the Petitioner – M/s Harsh Khanna and Sons HUF under Articles 226 and 227 of the Constitution of India, inter alia, seeking issuance of an appropriate writ assailing the Show Cause Notice bearing Reference No. ZD071124032468I dated 27th November, 2024 (hereinafter, ‘SCN’) issued by the Respondent- Assistant Commissioner, Laxmi Nagar Division, CGST Delhi East Commissionerate and Order-in-Original bearing No. 70/MSM/ADJ/AC/2024-25 dated 25th February, 2025 passed by the Respondent (hereinafter, ‘impugned order’).
4. The impugned order raises a demand in respect of the Input Tax Credit (hereinafter, ‘ITC’) availed by the Petitioner to the tune of Rs. 70,45,630/-. The operative portion of the order reads as under:
“(i) I confirm the demand of ITC of Rs. 70,45,630/- (IGST – Rs.67,31,943/-, CGST – Rs. 1,56,844/-, SGST – Rs. 1,56,843/-) (Rupees Seventy Lakh Forty Five Five Thousand Six Hundred and Thirty only) in violation of Section 16(4), 16(5) and 16(6) of the CGST Act, 2017 and order that the same be recovered from the Noticee under Section 73 of the CGST Act 2017 / DGST Act 2017 read with Section 20 of IGST Act 2017 and Rule 121 of the CGST Rules, 2017.
(ii) I hereby order for the recovery of interest at the appropriate rates on the tax amount mentioned at Sr. No.(i) above from the Noticee under Section 50 of the CGST ACT, read with responding section of the IGST Act, 2017 and SGST act, 2017;
(iii) I hereby order for the recovery of interest amounting to Rs. 2,01,218/- for delayed filing of GSTR 3B returns for the FY 2020-21 under Section 50 of the CGST ACT, read with corresponding section of the IGST Act, 2017 and SGST act, 2017;
(iv) I impose penalty of Rs.7,04,563/- (IGST -Rs. 6,73,194/-, CGST – Rs.15,684.5/-, SGST – Rs. 15,684.5/-) on the Noticee under Section 73 (9) of the CGST /DGST Act, 2017 read with Section 20 of IGST Act 2017 for wrong availment of ITC.
Assistant Commissioner
Laxmi Nagar Division
CGST Delhi (E) Commissionerate”
5. The issue that has arisen is in respect of the Petitioner’s belated filing of returns, which were to be filed by 30th November, 2021 but were filed on 14th December, 2021. Since the deadline under Section 16(5) of the Central Goods and Service Tax Act, 2017 (hereinafter, ‘CGST Act’) to file the returns is 30th November, 2021, the availment of the ITC has not been permitted to the Petitioner and hence, the demand has been raised.
6. A SCN was issued to the Petitioner on 27th November, 2024 along with personal hearing notices, however, the Petitioner did not file a reply or appear in the hearings, leading to passing of the impugned order.
7. The submissions of Mr. Akhil Krishan Maggu, ld. Counsel appearing for the Petitioner is that the delay of 14 days ought to be condoned and the demand deserves to be quashed as even the late payments charges have already been deposited by the Petitioner.
8. In the opinion of this Court, the question as to what is the effect of non-filing of returns within the prescribed period and whether there was a lapse on the Petitioner in even curing the deficiencies which were pointed out by the deficiency memo etc., would be factual aspects, which would have to be appreciated by the Appellate Authority.
9. The impugned order is appealable order under Section 107 of the CGST Act. The difficulty that the Petitioner expresses is that since no reply was filed, there are no documents on record on behalf of the Petitioner.
10. Accordingly, the Petitioner is permitted to avail of the appellate remedy under Section 107 of the CGST Act.
11. In the appeal, the Petitioner may file any documents it is relying upon in order to support its case.
12. The appeal shall be filed along with the pre-deposit.
13. The Appellate Authority shall consider the matter on merits itself and not dismiss it on the ground of limitation. The appeal shall be filed within 45 days.
14. The petition is disposed of in these terms. Pending application(s), if any, also stand disposed of.
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