2024 (9) TMI 228 - HC - GST

Legal Challenge Overturns GST Assessment Order, Mandates Reassessment Under Section 16(5) with New Procedural Safeguards

HC ruled on a GST assessment order challenging Input Tax Credit (ITC) disallowance. The court set aside the original order and directed reassessment ... Challenge to assessment order - Input Tax Credit has been disallowed only on the ground that the claims have been lodged beyond the period prescribed under Section 16(4) of the GST Acts - HELD THAT:- The impugned order, dated 30.04.2024 is set aside. The learned assessing adjudicating authority/respondent would re-do the assessment by taking into account the amendment referred supra. Apart from the issue relating to Section 16(4) of the GST Acts, there are three other issues viz., a) ineligibility to avail Input Tax Credit in terms of Section 17(5) of the GST Act b) Ineligible ITC declaration and c) excess ITC claimed inasmuch as, outward supplies not supported by E-way bills and discrepancies existing between GSTR-9 and GSTR-01. Since this Court is inclined to set aside the order insofar as it relates to invoking Section 16(4), assessing authority is also directed to reconsider the submissions of the petitioner with regard to the three other issues. The petitioner is at liberty to file their objections in respect of all the issues including Section 16(4) within a period of four weeks from the date of receipt of a copy of this order. The petition is disposed off. Issues: Challenge to assessment order based on disallowed Input Tax Credit under Section 16(4) of GST Act; Impact of amendment inserting Section 16(5) by Finance Act; Ineligibility to avail Input Tax Credit under Section 17(5) of GST Act; Ineligible ITC declaration; Excess ITC claimed due to discrepancies between E-way bills, GSTR-9, and GSTR-01.Analysis:The Writ Petition challenges an assessment order disallowing Input Tax Credit (ITC) based on claims lodged beyond the prescribed period under Section 16(4) of the GST Acts. The Petitioner argues that an amendment inserting Section 16(5) through the Finance Act allows ITC claims for specific financial years until November 30, 2021. The Petitioner contends that the assessment order should be reconsidered in light of this amendment, as the reasons cited by the adjudicating authority may no longer be valid.The Court acknowledges the impact of the amendment and sets aside the impugned order dated April 30, 2024. The assessing authority is directed to re-do the assessment considering the new amendment. Additionally, apart from the Section 16(4) issue, the Court identifies three other issues: ineligibility to avail ITC under Section 17(5) of the GST Act, declaration of ineligible ITC, and excess ITC claimed due to discrepancies in E-way bills, GSTR-9, and GSTR-01.The Court notes that these issues collectively result in a tax liability of Rs. 1,65,731. The assessing authority is instructed to reconsider the Petitioner's objections related to all issues, including Section 16(4), within four weeks. The Petitioner is granted the opportunity to file objections within the specified period, failing which the impugned order will be reinstated.Upon considering the above directions, the Writ Petition is disposed of with no costs awarded. The connected Miscellaneous Petitions are closed as a consequence of this judgment.