Debonding of capital goods and input tax credit dispute: directed to appeal to Joint Commissioner (Appeals) with delay condoned.

Challenge concerned legality of tax demand following debonding of capital goods and admissibility of input tax credit, including alleged double demand after customs discharge; availability of input tax credit and ineligibility under blocked credits was contested, with assessment, audit, recovery and interest provisions engaged. Customs NOC quantified customs duty, social welfare surcharge and IGST including IGST on indigenous goods, and part of the tax demand was not pursued by the petitioner. Petitioner was directed to prefer an appeal to the Joint Commissioner (Appeals) under the GST appeal provisions within the statutory period; writ disposed granting benefit of the writ period for condonation of delay.

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Issues: Whether writ relief is appropriate against the Order-in-Original dated 22.04.2024 raising demand under the MGST and CGST Acts, or whether the petitioner should be directed to pursue statutory appeal remedies before the appellate authority.

Analysis: The Court considered the factual position that customs authorities had assessed and certified payment of customs duty, SWS and IGST on de-bonding and issued an NOC; the petitioner contested certain components of the demand before the Court but the Commissioner of Customs filed an affidavit confirming the assessment and payment. The petitioner expressly relented to not contest a portion of the demand but sought leave to challenge specified disputed amounts by statutory appeal. Respondents did not oppose the petitioner pursuing the appellate remedy. In these circumstances the Court found that directing the petitioner to pursue the available statutory appeal would appropriately address the disputed tax components and permit consideration of condonation of delay for the period the writ petition remained pending.

Conclusion: The petitioner is directed to file an appeal before the Joint Commissioner (Appeals)I under Section 107 of the CGST Act, 2017 within six weeks from the date this order is made available on the Court website; the writ petition is disposed of in the above terms with liberty to avail benefit of the period during which the petition was pending for condonation of delay. No costs.

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