2024 (8) TMI 240 - HC - GST

Recovery Halted for 3 Months; Petitioner Allowed to File Revision and Appeal Under GST Law Within 60 Days.

The HC directed the respondent to suspend recovery proceedings for three months, permitting the petitioner to file a revision petition under Section 161 ... Challenge to demand arising from mismatch between GSTR-3B and GSTR-2A input tax credit - prima facie insufficiency of explanation for claimed IGST credit and impermissibility of dual credit under CGST and SGST - statutory revision under Section 161 of the respective GST enactments - interim abeyance of recovery pending disposal of statutory revisionChallenge to demand arising from mismatch between GSTR-3B and GSTR-2A input tax credit - prima facie insufficiency of explanation for claimed IGST credit and impermissibility of dual credit under CGST and SGST - Whether the impugned demand confirming tax, interest and penalty based on alleged excess Input Tax Credit warranted interference. - HELD THAT: - The Court examined the impugned order confirming demand for 2018-19 arising from the difference between Input Tax Credit availed in GSTR-3B and the auto-populated GSTR-2A. The respondent records that the petitioner had no excess IGST credit and the demand was accordingly confirmed. The Court found that the petitioner's explanations and figures were prima facie inconsistent with the Electronic Credit Ledger: the ledger showed an IGST closing/opening balance of Rs. 23,72,535 whereas the petitioner claimed higher IGST amounts credited as CGST and SGST respectively, producing an impossible dual availment. On this basis the Court did not find the impugned order sufficiently irregular to be quashed; rather, it observed that the petitioner's credit position as explained appears incorrect and that a clear explanation was lacking. The Court therefore refused to set aside the demand on merits at this stage. [Paras 9, 11, 12, 13, 14]The Court declined to interfere with the impugned order on merits while recording that the petitioner's explanation of IGST credit was prima facie incorrect.Statutory revision under Section 161 of the respective GST enactments - interim abeyance of recovery pending disposal of statutory revision - Procedural relief to be afforded pending statutory remedy and directions regarding further proceedings. - HELD THAT: - Although the Court did not annul the demand, it granted limited interim relief in the exercise of writ jurisdiction. The respondent was directed to keep recovery proceedings in abeyance for three months. The petitioner was permitted to file a revision petition under Section 161 of the respective GST enactments within 30 days; if filed within that period the respondent is directed to consider and dispose of the revision on merits. Pending disposal of such revision, recovery shall remain in abeyance for three months. If no revision is filed within the prescribed time, the respondent is at liberty to proceed in accordance with law. These directions preserve the petitioner's statutory remedy while protecting the respondent's right to enforce the demand if statutory remedies are not pursued. [Paras 15, 16]Recovery stayed for three months; petitioner may file revision under Section 161 within 30 days and respondent shall decide it on merits; if no revision is filed, respondent may proceed.Final Conclusion: Writ petition disposed by declining to set aside the impugned demand on merits while granting interim relief: recovery proceedings are stayed for three months and the petitioner is permitted to file a statutory revision under Section 161 within 30 days, which the respondent must decide on merits; if no revision is filed, recovery may proceed. Issues:Challenge to impugned order demanding Rs. 64,15,176/- towards CGST and SGST with interest and penalty.Analysis:The petitioner challenged the impugned order dated 30.04.2024, demanding Rs. 64,15,176/- (Rs. 32,07,588/- towards CGST and Rs. 32,07,588/- towards SGST) along with interest and penalty. The demand was confirmed under the SGST Act and CGST Act for the period 2018-19. The petitioner received notices in ASMT 10 dated 27.11.2022 and DRC 01 dated 23.08.2023, to which responses were submitted on 16.11.2023 and 26.02.2024. The notice in DRC 01 focused on the variance between Input Tax Credit in GSTR 3B and GSTR 2A. The petitioner's explanation was deemed unacceptable as it lacked documentary evidence as per Circular No.183/2023. Despite explanations, the respondent confirmed the demand, leading to the challenge.The respondent argued that the impugned order was free from irregularities and did not warrant interference under Article 226 of the Constitution of India. It was stated in the order that the petitioner did not have excess Input Tax Credit concerning IGST, justifying the confirmed demand. The petitioner, in response, presented details from the Electronic Credit Ledger showing a discrepancy in the IGST amounts claimed under CGST and SGST credits. The court noted the inconsistency and directed the respondent to halt recovery proceedings for three months, allowing the petitioner to file a revision petition under Section 161 of the GST enactments within 30 days. If the petition is rejected, the petitioner can file a statutory appeal within 30 days thereafter. Recovery proceedings will remain suspended during this period. Failure to file the petition within the stipulated time empowers the respondent to proceed legally.In conclusion, the writ petition was disposed of with the above directions, and no costs were awarded. The connected miscellaneous petition was closed as a result of the judgment.