Santu Das Vs Assistant Commissioner of CGST & C. EX (Calcutta High Court)
The Calcutta High Court heard the writ petition finally, although it was listed for extension of an interim order, with the consent of the parties. The petitioner challenged the adjudication order passed under Section 73(9) of the WBGST/CGST Act, 2017 for the tax periods 2017-18 and 2018-19, as well as two appellate orders dated 23 March 2023 passed under Section 107. The appellate orders confirmed the demand raised through Form GST DRC-07 and, in the departmental appeal, enhanced the penalty from Rs. 1,00,000 to Rs. 3,80,597.
A show cause notice dated 6 July 2021 under Section 73(1) raised three issues. First, it alleged irregular availment and utilisation of input tax credit (ITC) for 2018-19 on the ground that the petitioner had filed returns under Section 39 beyond the prescribed period. Second, it alleged excess availment of ITC amounting to Rs. 4,04,174 for 2017-18 based on discrepancies identified in GSTR-9, including mismatch between ITC disclosed in GSTR-3B and the tax details auto-populated in GSTR-2A. Third, it alleged short payment of GST amounting to Rs. 52,208 arising from differences between GSTR-1 and GSTR-3B.
The petitioner responded to the show cause notice. Thereafter, the proper officer passed an order under Section 73(9), holding the petitioner in default on all three issues, raising a demand of Rs. 19,02,986 through Form GST DRC-07 dated 25 October 2021, and imposing a penalty of Rs. 1,00,000 under Section 73(1) read with Section 73(9). The petitioner filed an appeal, while the department separately appealed seeking enhancement of the penalty. By order dated 22 March 2023, the petitioner’s appeal was rejected. The appellate authority allowed the departmental appeal by observing that Section 73(9) prescribed a mandatory penalty of 10% of the tax or Rs. 10,000, whichever is higher, and accordingly enhanced the penalty, following which a demand in Form GST APL-04 was raised.
