Revenue neutrality and GSTR-9 disclosure must be considered before taxing demand; later GST filing restrictions cannot apply retrospectively.

The appellate authority had to consider the assessee's GSTR-9 annual return, the pleaded unavailed input tax credit on inward supplies, and the claim of revenue neutrality when re-examining the tax demand; ignoring those materials was not sustained. The Court also held that the amended restriction in Section 44(2) of the GST law could not be applied to an annual return filed before the amendment took effect, as the earlier regime did not create an absolute bar to late filing and provided for a late-fee mechanism. The impugned appellate order was set aside and the matter remanded for fresh consideration.

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Issues: (i) Whether the appellate authority was bound to consider the assessee's annual return in Form GSTR-9, the unavailed input tax credit on inward supplies, and the resulting claim of revenue neutrality while re-examining the tax demand; (ii) Whether the amended restriction in Section 44(2) of the Goods and Services Tax law could be applied to the assessee's annual return filed before the amendment took effect.

Issue (i): Whether the appellate authority was bound to consider the assessee's annual return in Form GSTR-9, the unavailed input tax credit on inward supplies, and the resulting claim of revenue neutrality while re-examining the tax demand.

Analysis: The annual return filed in Form GSTR-9 was material to the controversy because it reflected the assessee's corrected disclosure. The Court held that where the assessee asserts that it did not avail input tax credit on inward CESS and that the demand on outward supplies should be neutralised by the available but unutilised credit, the tax authorities cannot ignore that aspect altogether. Reference was made to Article 265 of the Constitution of India, which requires that tax be levied and collected only by authority of law. On that reasoning, the appellate authority was required to give due regard to the annual return and the pleaded revenue-neutral position.

Conclusion: The assessee's annual return and the claimed input tax credit position had to be considered by the appellate authority; the omission to do so was not sustained.

Issue (ii): Whether the amended restriction in Section 44(2) of the Goods and Services Tax law could be applied to the assessee's annual return filed before the amendment took effect.

Analysis: The Court held that the pre-amendment position under Section 44(2) did not impose a fatal prohibition against filing the annual return beyond the stated date. The amendment introducing a mandatory prohibition was stated to take effect from 1 October 2023 and could not govern a return filed earlier. The presence of a late-fee mechanism also indicated that late filing was not intended to be totally barred under the earlier regime.

Conclusion: The amended restriction in Section 44(2) did not apply to the assessee's return filed before the amendment came into force.

Final Conclusion: The impugned appellate order was set aside and the matter was sent back for fresh consideration in accordance with law, with the assessee obtaining substantive relief on the issues of GSTR-9 and revenue neutrality.

Ratio Decidendi: Where a tax assessee's corrected annual return and unavailed input tax credit are relevant to the ultimate liability, the appellate authority must consider them, and a later statutory prohibition on late filing cannot be applied to invalidate an earlier return filed before the amendment's commencement.

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