Taxpayer Wins Interim Relief in CGST Act Dispute, Secures Input Tax Credit Benefits Pending Final Resolution

HC ruled on a tax credit dispute involving CGST/WBGST Act, 2017. The court granted interim relief to the petitioner challenging an adjudication order, allowing potential Input Tax Credit benefits pending the Finance Bill's passage. An interim order was issued restraining coercive actions, with a directive for a partial deposit of Rs. 25 lakhs and protection until September 2024.

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Issues:
1. Challenge to adjudication order under Section 73(9) of CGST/WBGST Act, 2017.
2. Claim of Input Tax Credit (ITC) based on late filing of GSTR-3B.
3. Proposed amendment to Section 16(4) of the Act affecting ITC benefits.
4. Entitlement to interim relief pending the passing of the Finance Bill.

Analysis:
1. The petition challenges an adjudication order under Section 73(9) of the CGST/WBGST Act, 2017, issued on 29th April, 2024, in Form GST/DRC 07. The challenge is not pressed on Prayer-A but is confined to other prayers in the writ petition.

2. The issue revolves around the claim of ITC based on returns filed by the petitioner after the prescribed deadline under Section 16(4) of the Act. The petitioner's ITC claims in GSTR-3B were found reversible due to filing after the deadline, leading to the initiation of the present writ petition.

3. A significant development is the proposed amendment to Section 16(4) of the Act through the Finance Bill No.2 of 2024, which aims to allow registered persons to benefit from ITC in returns filed under Section 39 of the Act until 30th November, 2021, for specific financial years. This proposed amendment could impact the petitioner's entitlement to ITC worth Rs. 63,28,114.

4. The Court acknowledges the potential impact of the pending Finance Bill on the petitioner's case and grants interim relief. Despite the bill not yet becoming an Act, the Court deems it appropriate to provide interim protection to the petitioner, considering the proposed amendment's relevance to the petitioner's ITC claims for the financial year 2018-19. An interim order is issued to prevent multiple legal proceedings and directs the petitioner to make a deposit of Rs. 25 lakhs within three weeks to secure part of the determination already made. Additionally, the respondents are restrained from taking coercive actions for three weeks, subject to compliance with the payment directive. The interim relief is set to continue until the end of September 2024 or further orders, depending on the situation.

This detailed analysis covers the key issues raised in the legal judgment, outlining the challenges faced by the petitioners regarding ITC claims, the proposed legislative amendment affecting their case, and the interim relief granted by the Court pending the passage of the Finance Bill.

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