2024 (5) TMI 316 - HC - GST

Assessment order set aside after department transfers Rs. 63 lakh to state government, refund of pre-deposit ordered within eight weeks

M/s. Cosyn Limited Versus Assistant Commissioner of State Tax; Bowbazar Charge & Ors.

The Calcutta HC allowed an appeal challenging a writ petition dismissal regarding an assessment order's validity and input tax credit utilization. The ... Validity of assessment order - Utilization of Input Tax Credit - dismissed on the ground that it is an appealable order - Applicability of section 5 of the Limitation Act, 1963 - impugned assessment order in the writ petition was stayed subject to the condition that the appellant/assessee deposits 10% of the disputed tax within a time frame - HELD THAT:- The stand taken by the Department of Commercial Taxes, Government of West Bengal, the amount of Rs. 63,71,353/- has been transferred to the Government of West Bengal - the assessment order, which was the subject-matter of challenge in the writ petition can no longer survive. The appeal is allowed, the order passed in the writ petition is set aside and the writ petition is allowed and the impugned assessment order dated 21st August, 2023 is set aside - the respondent/department is directed to refund the 10% pre-deposit made by the appellant pursuant to the interim order granted by this Court within eight weeks from the date of receipt of server copy of this order. Issues involved: Challenge against assessment order u/s W.B.G.S.T. Act, specific contention not addressed in affidavit-in-opposition, appearance of State of Telangana, verification of input tax credit utilization, transfer of tax amount to State of West Bengal, refund of pre-deposit.Challenge against assessment order: The appellant challenged an assessment order u/s W.B.G.S.T. Act which was dismissed as appealable. The impugned assessment order was stayed subject to a 10% tax deposit by the appellant. The Court directed the State to address specific contentions raised by the appellant regarding input tax credit utilization for payment of SGST and transfer to the State of West Bengal.Specific contention not addressed: The appellant's claim of utilizing input tax credit for payment of SGST and subsequent transfer to the State of West Bengal was not specifically dealt with in the affidavit-in-opposition. The Court directed the State to obtain written instructions from the appropriate authority to address these allegations, emphasizing the importance of the State of Telangana's stand in the appeal.Appearance of State of Telangana: Despite notice and service, the State of Telangana did not enter appearance. The Court granted liberty to serve all relevant documents to enable the State of Telangana to participate in the proceedings, highlighting the relevance of their stance for adjudication.Verification of input tax credit utilization: The Deputy Commissioner provided written instructions upon verification of records, confirming the utilization and transfer of input tax credit amounts to the State of West Bengal. The Court noted the transfer of Rs. 63,71,353 to the State of West Bengal as per the provisions of the IGST Act.Transfer of tax amount to State of West Bengal: The amount of Rs. 63,71,353, adjusted from SGST with IGST ITC, was transferred to the Government of West Bengal. Consequently, the assessment order under challenge was deemed unsustainable, leading to the allowance of the appeal and setting aside of the impugned assessment order.Refund of pre-deposit: The Court directed the department to refund the 10% pre-deposit made by the appellant within eight weeks from the date of the order. No costs were imposed, and urgent certified copies of the order were to be provided to the parties upon completion of legal formalities.