2024 (9) TMI 1001 - HC - GST

Tax Credit Relief: Late GSTR 3B Filers Granted Partial ITC and Temporary Protection Against Coercive Actions

Adhiraj Distributors Limited & Anr. Versus The Additional Commissioner of Revenue, Chowringhee Circle, Government of West Bengal & Ors.

HC ruled on a tax credit dispute involving late GSTR 3B filing. The court granted an interim order allowing partial Input Tax Credit based on proposed ... Challenge to adjudication order passed u/s 73(9) of the CGST/WBGST Act, 2017 - HELD THAT:- Taking note that a sum of Rs. 3,96,08,142/- was found to be reversible, as would appear from the show cause notice, for reasons of the petitioners having availed ITC by filing GSTR 3B after the last date and since, from the Finance Bill No.02, being Bill No.55 of 2024, it would appear that in Clause 114, amendment of Section 16 of the said Act has been proposed thereby making a provision to give benefit to those registered tax payers who are entitled to Input Tax Credit and have filed a return under Section 39 of the said Act up to 30th November, 2021, in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial years 2017-18, 2018-19, 2019-20 and 2020-21, and since the petitioners had filed Form 3B for the Tax period 2018-2019, belatedly but before 30th November, 2021, the petitioners having made out a prima facie case are entitled to an interim order, as the finance bill no.2 of 2024 takes care of a major part of the determination made under Section 73 of the said Act for the Financial Year 2018-19. The petitioners are directed to make a deposit with the learned Registrar General a sum of Rs.25 lakhs within a period of 3 weeks from date. If the aforesaid amount is deposited with the learned Registrar General, the same shall be invested in any interest bearing fixed deposit account with any Nationalized Bank of his / her choice and the same shall be kept renewed until further order of this Court. Issues:1. Challenge to an adjudication order under Section 73(9) of the CGST/WBGST Act, 2017.2. Claim of Input Tax Credit (ITC) based on late filing of GSTR 3B.3. Proposed amendment in the Finance Bill to allow ITC benefit for certain tax periods.4. Prima facie case for an interim order based on the Finance Bill provisions.5. Direction for the petitioners to make a deposit to secure part of the determination amount.6. Unconditional order restraining coercive steps by respondents for a specified period.7. Exchange of affidavits and liberty to mention for inclusion.Analysis:The judgment of the Calcutta High Court pertains to a writ petition challenging an adjudication order under Section 73(9) of the CGST/WBGST Act, 2017, dated 22nd January, 2024. The petitioners contested the denial of Input Tax Credit (ITC) amounting to Rs.3,96,04,918 under IGST, Rs.1612 under CGST, and Rs.1612 under SGST due to the late filing of GSTR 3B beyond the prescribed deadline of 20th October, 2019. The petitioners relied on a proposed amendment in the Finance Bill to allow ITC benefit for returns filed up to 30th November, 2021, pertaining to specific financial years. The Court considered the prima facie case made by the petitioners and granted an interim order based on the potential impact of the Finance Bill on the determination made under Section 73 for the Financial Year 2018-19.Furthermore, the Court directed the petitioners to deposit Rs.25 lakhs with the Registrar General within three weeks to secure a part of the determined amount. This deposit was to be invested in an interest-bearing fixed deposit account until further court orders. Additionally, the Court issued an unconditional order restraining the respondents from taking coercive steps against the petitioners for three weeks from the date of the judgment. The interim order was to remain in effect until the end of September 2024 or until further orders, provided the petitioners complied with the payment directive. The judgment also allowed the parties to exchange affidavits and granted liberty to mention for inclusion, ensuring procedural fairness and further opportunities for submissions in the case.