Surender Gupta Vs Appellate Authority State GST/Additional Commissioner Grade-II and 2 others (Allahabad High Court)
Allahabad High Court allows recovery of penalty suffered by the recipient due to non-compliance of law at the end of supplier
High Court has held that where the proceedings have been concluded against the recipient under Section 73 of Central Goods and Services (‘CGST’) Act due to non-reflection of ITC in the relevant returns, the supplier shall be made liable to compensate the loss caused to the recipient.
Facts of the case
- The petitioner had paid rent to New Okhla Development Authority (‘NOIDA’) along with GST.
- NOIDA treated that receipt under the head B2C supplies, made payment to tax authorities and filed GST returns accordingly. Since the supplies were mentioned in the category of B2C supplies, the same never reflected in GSTR-2A of the recipient.
- In the meanwhile, proceedings were initiated against the petitioner under section 61 and Section 73 of CGST Act where the demand was confirmed against the petitioner.
- NOIDA whereas accepted the lapse at its end, however it alleged that if the Petitioner had approached the Authority at that time, the Authority could have filed the rectification application.
- The Hon’ble court held that since the NOIDA has made admission of lapse, the impugned orders cannot be said to be arbitrary and don not call for any interference by the Court.
- The Court further observed that the petitioner cannot be permitted to suffer to the mistake committed on the part of NOIDA.
- Therefore, the Court directed NOIDA to compensate the loss caused (i.e. penalty amount) to the petitioner.
- The Court further held that NOIDA is at liberty to recover the said amount from the erring officer of its department
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
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