Commissioner CGST & CX Vs Power Tech Global Private Limited (Kolkata GSTAT)
Summary: The Kolkata Bench of GSTAT has held that the amendment introduced by Notification No. 14/2022 dated 5 July 2022 to Explanation 1 of Rule 43 of the CGST Rules, whereby the value of specified duty credit scrips was excluded from the aggregate value of exempt supplies for ITC reversal, cannot be applied retrospectively to transactions undertaken during FY 2017-18 to FY 2019-20.
The Tribunal noted that although the rule-making authority had statutory power to give the amendment retrospective effect, the notification expressly brought it into force from 5 July 2022. The amendment therefore operated prospectively.
However, the Tribunal separately held that the Revenue had failed to establish fraud, wilful misstatement or suppression of facts with intent to evade tax. The taxpayer had disclosed its transactions and its claim of ITC; the Department was also aware of the taxpayer’s dealings in duty credit scrips. Consequently, invocation of Section 74(1) was held unsustainable.
Applying Section 75(2) of the CGST Act, the Tribunal directed the proper officer to determine the tax liability as if the notice had been issued under Section 73, after providing an opportunity of hearing to the taxpayer.
