AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 1864
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.... short "the GST Act"], is in the business of trading of ferrous waste and scrap etc. As part of his business, the petitioner purchases scrap from Indian Railways. The GST, payable on purchase of such scrap from Indian Railways is to be discharged by the purchaser under the reverse charge mechanism. 2. An audit was conducted, on the books of the petitioner, for the period 2017-2018 and 2018-2019. In the course of this audit, it was found that the petitioner had deposited, in cash, in his electronic credit ledger, the GST payable under the reverse charge mechanism. However, the necessary debit entries, appropriating these amounts, to the Government were not carried out. Apart from this, the audit report also reveals that the petitioner wit....
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....[for short "the CGST Act"] and would fall within ambit of Section 74 of the GST Act. 4) As there was delay in debiting the GST payment, the petitioner would also be liable to pay interest for the period of delay. 4. In response to these contentions, the petitioner filed his objections. The petitioner contended that the petitioner had paid the GST, under reverse charge mechanism, within time by depositing cash in his electronic credit ledger. The petitioner, contended that under the earlier Andhra Pradesh Value Added Tax regime etc., the tax payers were only required to deposit the tax and there was no further step of debiting the same to the Government. The petitioner contended that he had proceeded on that basis and had assumed....
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....he petitioner had occurred only after the audit report had revealed the aforesaid nonpayment of tax and as such, adjustment of the said amount cannot be taken to be mere case of misreporting and it would amount to a case of suppression of fact and willful misstatement. 7. The 2nd respondent, in view of the above findings had ordered recovery of an amount of Rs. 1,11,41,108/- which was to be appropriated against the amount had already paid; recovery of interest of Rs. 60,87,401/-; penalty of Rs. 1,11,41,109/-, under Section 74(9) of the CGST Act read with Section 20 of the IGST Act, 2017 and Section 122 2(b) of the CGST Act, 2017; recovery of amount of GST at Rs. 1,11,41,108/- as wrongful availment of input tax credit availing violation o....
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....covery this amount after passage of certain time inasmuch as the period for assessment as per the Section 73 of the GST Act or the Section 74 of the GST Act would have expired. The Revenue therefore contends that this was an exercise of evasion of tax and the same could be interdicted only on account of the timely conduct of audit of the accounts of the petitioner. 11. Smt. Jyothi Ratna Anumolu, learned counsel for the petitioner on the other hand would contend that there was no such intention on the part of the petitioner and the petitioner had demonstrated his bona-fides by depositing the entire tax amount due from the petitioner, by payment of cash. She also contends that the petitioner, due to ignorance of law and on the assumption t....
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....s determination of all the aforesaid issues raised by both sides. CONSIDERATION OF THE COURT:- 14. At the outset, it may be noted that there is no dispute as to the quantum of tax payable by the petitioner and the entire dispute revolves only around the question of whether such tax is said to have been paid or not, in time, and whether availment of input tax credit, on the ground that such tax had been paid was correct or not and the consequences thereupon. 15. In the present case, the petitioner has deposited cash, under the reverse charge mechanism to the extent of his GST liability in his electronic credit ledger. There is no dispute, that the cash deposited by the petitioner covers the GST liability of the petitioner. There is ....
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....ary appropriation, is said to have claimed the input tax credit, to the extent of the amounts which had been credited into the electronic credit ledger of the petitioner. Under Section 16 of the GST Act, stipulates that such credit can only be taken after the necessary credit is available in the electronic credit ledger. It is true that the petitioner could not have availed of the input tax credit, arising out of the payments made by him, as the same had not yet been appropriated to the Government. However, the view of the 2nd respondent that the said input tax credit should be recovered may not to be correct. The input tax credit, wrongful availed, without underlying payment of tax, could always be recovered. However, since the petitioner ....