TaxTMI 
TaxTMI 
2026 (8) TMI 1680
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....ervices Act (KGST Act) in respect of the demand arising from the excess Input Tax Credit availed in FORM GSTR-3B for the month of December 2020, on the contention that the said ITC related to transactions/debit notes pertaining to the financial year 2018-19? Brief Facts of the case: 3.1 The Appellant was engaged in the business of trading in garments manufacturing with GSTIN: 29AAACR4984R1ZD under the provision of the KGST Act, 2017 and is deregistered effective from 31.03.2021. 3.2 Based on the scrutiny of the Returns for the year 2020-21, the Appellant was served with a notice u/s 61 of KGST Act, 2017/CGST Act, 2017 in Form GST ASMT-10 dated: 08.02.2024 bringing out an excess availment of Input Tax Credit of IGST of Rs. 68,573, CGST of Rs. 2,46,747 and SGST of Rs. 2,46,747 as per the Form GSTR-3B filed for the period December 2020 pertaining to the year 2020-21 as against the ITC available as per Form GSTR 2A for the relevant period. The ASMT-10 followed by an intimation in Form GST DRC-01A on 02.07.2024. 3.3 Thereafter a Show Cause Notice in Form DRC-01 vide no. ACCT/LGSTO-16/2A Vs 3B/M2-20-21/2024-25 dated 15.11.2024 was issued under Section 73 of CGST and KGST Acts....
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....erizing the tax period under appeal. Jurisdictional limitations under Section 107 cannot be diluted even in the context of an amnesty provision. ▪ In the absence of any infirmity demonstrated within the confines of FY 2020-21 and the findings recorded in the impugned order, and in view of the settled legal position that appellate proceedings cannot travel beyond the order appealed against, the appeal is devoid of merit. 3.7 Aggrieved by the above decision of the First Appellate Authority the Appellant has filed the present appeal before this Tribunal. Submissions by the Appellant: 4.0 The Counsel for the Appellant Adv Vinayak B D appeared and submitted as follows: 4.1 Though the Liability was declared and Tax paid in the month of December 2020, the transaction relates to FY 2018-19. This fact was also declared in GST annual returns for the period 2019-20, upon discovery of the error while finalizing the books for FY 2019-20. Since there was no option to go back and change the Returns for the FY 2018- 19, the details were declared in Annual Return of 2019-20 and the Liability was discharged in the month of Dec-2020. Accordingly, the said liability on exces....
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....re us. We have also heard Dr Ramya Deputy Commissioner KGST, who is representing the Respondent in this appeal. 6.2 The main contention of the Counsel appearing on behalf of the Appellant is that the alleged excess ITC relates to FY 2018-19, notwithstanding that the corresponding amount was reported and paid in December 2020. According to the Appellant, the liability should therefore be treated as pertaining to an eligible period for the purposes of Section 128A of the CGST Act. The question, however, is whether, on the facts and records of the present case, the demand confirmed under Section 73 pertains to FY 2018- 19 or to the tax period December 2020. 6.3 In this respect we would like to examine the provisions of Section 128 A of the CGST Act as inserted by the Finance (No. 2) Act, 2024, w.e.f. 1-11-2024. The Section 128A reads thus: 128A. (1) Notwithstanding anything to the contrary contained in this Act, where any amount of tax is payable by a person chargeable with tax in accordance with,- (a) a notice issued under sub-section (1) of section 73 or a statement issued under sub-section (3) of section 73, and where no order under sub-section (9) of sectio....
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.... and penalty has already been paid, no refund of the same shall be available. (2) Nothing contained in sub-section (1) shall be applicable in respect of any amount payable by the person on account of erroneous refund. (3) Nothing contained in sub-section (1) shall be applicable in respect of cases where an appeal or writ petition filed by the said person is pending before Appellate Authority or Appellate Tribunal or a court, as the case may be, and has not been withdrawn by the said person on or before the date notified under sub-section (1). (4) Notwithstanding anything contained in this Act, where any amount specified under sub-section (1) has been paid and the proceedings are deemed to be concluded under the said sub-section, no appeal under sub-section (1) of section 107 or sub-section (1) of section 112 shall lie against an order referred to in clause (b) or clause (c) of sub-section (1), as the case may be. [Emphasis supplied in bold] 6.4 Eligibility under Section 128A is not determined merely by the fact that tax has been paid. The statutory conditions must be satisfied cumulatively. The demand must arise from a notice, statement or ord....
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....low the procedure prescribed in the Circular and apply the said Circular to the facts of the instant case of the petitioner, 5th respondent and their transactions for the years 2017-18, 2018-19 and 2019-20. It is also necessary to state that though the Circular refers only to the years 2017-18 and 2018-19, since there are identical errors committed by the petitioner not only in respect of the assessment years 2017-18 and 2018-19 but also in relation to the assessment year 2019-20 also, I am of the view that by adopting a justice oriented approach, the petitioner would be entitled to the benefit of the Circular for the year 2019- 20 also" 6.9 We have considered the decision of the Hon'ble High Court of Karnataka supra and find that the same is distinguishable on facts and in law. The decision concerned the application of a CBIC circular dealing with reconciliation of ITC mismatch, whereas the present appeal concerns the statutory conditions governing the waiver under Section 128A. The circular cannot be read as enlarging the period expressly specified by Legislature in Section 128A equally, however, the fact of payment before the prescribed date is not, by itself, a ground to den....
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....2018-19. The year for which the Order was issued (2020-21) contains absolutely no commercial transactions such as Sale or Debit note on which Tax liability arises. It is also submitted that the output tax liability as declared for the month of December 2020 was actually arose out of Debit notes issued for the month of February 2019. The Appellant further submitted as below: "It is most respectfully submitted that the Applicable Tax, being excess claim of ITC of Rs. 5,62,067/- was discharged vide DRC-3 bearing ARN : AD290125016015J on 09-01-2025, well in advance of passing of the order U/s 73 by the Learned AO and well in advance of the due date to have filed an application U/s 128A of the CGST Act for waiver of Interest and Penalty. It is only due to the denial by the Learned AO to consider this tax liability as pertaining to the period of 2018-19 and instead concluding the order as pertaining to period 2020-21 that the Taxpayer was unable to make an application U/s 128A of the CGST Act. Attention of your Honour is again sought here to the fact that due to a Procedural / Technical limitation, the Taxpayer was unable to file the application for waiver of Interest and penalt....