Kondamma Trading Vs Assistant Commissioner of CGST & Central Excise (Madras High Court)
The Madras High Court considered a writ petition filed by Kondamma Trading challenging the respondent’s order and seeking permission to rectify GST returns filed for November 2018, December 2018, February 2019, April 2019, May 2019 and July 2019. The petitioner submitted that its books of account had been audited by the Officers of GST Audit I Commissionerate, Chennai, for the period from July 2017 to March 2020 during June 2022. Following the audit, the respondent issued a show cause notice dated 22.07.2022 concerning incorrect availment of input tax credit under different tax heads. The petitioner had availed IGST credit of Rs.6,99,220/- instead of CGST and SGST credit on the strength of invoices issued by suppliers from April 2019 to March 2020. Similarly, CGST credit of Rs.8,48,773/- and SGST credit of Rs.8,48,773/- had been availed instead of IGST credit on the strength of supplier invoices for the same period. The petitioner therefore sought to shift the ITC already claimed from one head to another, but the request was rejected by the respondent.
The respondent contended that the petitioner had a remedy under Section 161 of the GST Act by filing a rectification application. Since no such application had been filed, the Department had rejected the petitioner’s request. It was further submitted that, upon filing the rectification application, the respondent would consider the matter and, if the credit had genuinely been availed under the wrong head, could reverse it by changing the credit from one head to another.
The Court, after hearing both sides and perusing the materials available on record, declined to entertain the writ petition. However, while rejecting the petition, the Court granted liberty to the petitioner to file a rectification application under Section 161 of the GST Act. The Court directed that, if such application was filed, the respondent should consider it on merits and pass appropriate orders to change the credit from one head to another within eight weeks from receipt of a copy of the order, or otherwise in accordance with law.
Accordingly, the writ petition was dismissed with the aforesaid liberty. The connected writ miscellaneous petition was also closed. The decision therefore leaves the petitioner to pursue the statutory rectification mechanism rather than obtaining the requested correction directly through the writ petition.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed challenging the impugned order passed by the respondent and to direct the respondent to allow the petitioner to rectify the GST returns filed for the month of November 2018, December 2018, February 2019, April 2019, May 2019 and July 2019.
2. Ms.R.Hemalatha, learned Standing counsel, takes notice on behalf of the respondent.
3. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.
4. The learned counsel for the petitioner would submit that the books of account were audited by the Officers of GST Audit I Commissionerate, Chennai 600 101 for the period from July 2017 to March 2020 during June 2022. On perusal of the said audit report, the respondent had issued a show cause notice dated 22.07.2022 to the petitioner, since the petitioner had availed the IGST credit of a sum of Rs.6,99,220/- instead of CGST and SGST credit on the strength of invoices issued by their suppliers from April 2019 to March 2020. Similarly, the petitioner also availed the CGST credit for a sum of Rs.8,48,773/- and the SGST credit for a sum of Rs. 8,48,773/- instead of IGST credit on the strength of invoices issued by the supplier for the period from April 2019 to March 2020.
5. He would further submit that under these circumstances, the petitioner made a representation to shift the ITC Credit, which was already claimed, from one head to another and the same was simply rejected by the respondent by virtue of the said impugned order.
6. Per contra, the learned counsel for the respondent would submit that the rights available to the petitioner to correct the mistake is by filing a rectification application under Section 161of the Goods and Services Tax Act (hereinafter called as “GST Act”). However, in the present case, the petitioner had not filed any rectification application. Therefore, the Department had rejected the request of the petitioner and passed the said order.
7. Further he would submit that once the rectification application is filed by the petitioner, a rectification order will be passed by the respondent and if the petitioner had availed the credit under wrong head and the same is genuine, it would be reversed by changing one head to another head. Hence he prays for dismissal of this writ petition.
8. Heard the learned counsel for the petitioner and the respondent and also perused the materials available on record.
9. In view of the above, this Court is not inclined to entertain the present petition. Further, while rejecting this petition, this Court grants liberty to the petitioner to file a rectification application under Section 161 of the GST Act and in such case, this Court directs the respondent to consider the said application on merits and pass appropriate orders to change the credit from one head to another head, within a period of eight weeks from the date of receipt of copy of this order, or otherwise in accordance with law.
10. Accordingly, this writ petition is dismissed with the aforesaid liberty. Consequently, the connected writ miscellaneous petition is also closed.
