Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 31ST DAY OF OCTOBER 2023 / 9TH KARTHIKA, 1945 WP(C) NO. 33214 OF 2023 PETITIONER:
LAJEESH BABU, PROPRIETOR, E B S CRANES & TRANSPORTS, CC29/3058D,MINI BYPASS JUNCTION, POONITHURA, ERNAKULAM, PIN – 682038.
BY ADVS.
SRI. LAL K. JOSEPH SRI. P. MURALEEDHARAN (THURAVOOR) SMT. T. A. LUXY SRI. SURESH SUKUMAR SRI. ANZIL SALIM RESPONDENTS:
1 STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM, PIN – 695001.
2 THE COMMISSIONER OF STATE TAX, SGST DEPARTMENT, TAX COMPLEX, KARAMANA, THIRUVANANTHAPURAM, PIN – 695002.
3 THE DEPUTY COMMISSIONER (ARREAR RECOVERY), SGST DEPARTMENT, THEVARA, ERNAKULAM, PIN – 682015.
4 STATE TAX OFFICER (WORKS CONTRACT), SGST DEPARTMENT, CLAS TOWER, OLD RAILWAY STATION ROAD, KOCHI-682018, PRESENTLY REDESIGNED AS THE STATE TAX OFFICER, TAX PAYER SERVICE CIRCLE, SGST DEPARTMENT, MINI CIVIL STATION, THRIPUNITHURA, ERNAKULAM, PIN – 682301.
BY ADV.
SMT. RESHMITA RAMACHANDRAN – GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 33214 OF 2023 2 DINESH KUMAR SINGH, J.
-------------------------- W.P.(C) No.33214 of 2023 ------------------------- Dated this the 31st day of October, 2023 JUDGMENT 1.
The present writ petition under Article 226 of the Constitution of India has been filed impugning Exhibit P-2 recovery notice dated 05.09.2023 as well as Exhibit P-4 adjudication order dated 01.02.2022. The petitioner is a registered dealer under the provisions of Central Goods and Services Tax (CGST) Act as well as the State Goods and Services Tax (SGST) Act. Petitioner had received supply of Goods from M/s. T. V. Sundaram Iyengar & Sons Private Limited, a registered dealer under the CGST/SGST for the financial year 2017-18. The petitioner had claimed input tax credit in respect of the said supply from M/s. T. V. Sundaram Iyengar & Sons Private Limited. In FORM GSTR 1 filed by M/s. T. V. Sundaram Iyengar & Sons Private Limited, they did not mentioned FORM GSTIN of the petitioner and therefore tax on the said supply was not reflected in FORM GSTR 2A of the petitioner. The petitioner’s claim for input tax credit in respect of the said supply was denied by the
WP(C) NO. 33214 OF 2023 3 Assessing Officer in Exhibit P-4 order. The petitioner brought it to the notice of M/s. T. V. Sundaram Iyengar & Sons Private Limited that the supply made by them in the financial year 2017-18 to the petitioner was not reflected in FORM GSTR 2A. However, the supplier/dealer could not amend FORM GSTR 1 within the time and therefore tax paid on the said supply was not reflected and it resulted indenial of claim of the petitioner for input tax credit in respect of the supply from M/s. T. V. Sundaram Iyengar & Sons Private Limited for the financial year 2017-18.
2.
The Learned Counsel for the petitioner submits that the Government of India, Department of Revenue, Central Goods Indirect Tax and Customs considered the difficulties faced by the assessees in the initial year in respect of difference in input tax availed in FORM GSTR 3B has compared to that received in FORM GSTR 2A for the financial year 2017-18 and 2018-19 and has issued clarification vide Exhibit P-6 Circular No.183/15/2022-GST dated 27.12.2023 and it has said that where the supplier has filed FORM GSTR – 1 as well as return in FORM GSTR – 3B for a tax period, but he has declared the supply with wrong GSTIN of the recipient in FORM GSTR – 1, the difference regarding the ITC claim by the
WP(C) NO. 33214 OF 2023 4 recipient dealer in its FORM GSTR – 3B, but it is not reflected in FORM GSTR – 2A because of wrong GSTIN of the recipient, the procedure has to be followed is amended in paragraph 4 of Exhibit P-6 Circular dated 27.12.2023. Paragraph 4 of the said Circular reads as under;
“4.
The proper officer shall first seek the details from the registered person regarding all the invoices on which ITC has been availed by the registered person in his FORM GSTR 3B but which are not reflecting in his FORM GSTR 2A. He shall then ascertain fulfillment of the following conditions of Section 16 of CGST Act in respect of the input tax credit availed on such invoices by the said registered person:
i) that he is in possession of a tax invoice or debit note issued by the supplier or such other tax paying documents;
ii) that he has received the goods or services or both;
iii) that he has made payment for the amount towards the value of supply, along with tax payable thereon, to the supplier.
Besides, the proper officer shall also check whether any reversal of input tax credit is required to be made in accordance with section 17 or section 18 of
WP(C) NO. 33214 OF 2023 5 CGST Act and also whether the said input tax credit has been availed within the time period specified under sub-section (4) of section 16 of CGST Act.
4.1 In order to verify the condition of clause (c) of sub-section (2) of Section 16 of CGST Act that tax on the said supply has been paid by the supplier, the following action may be taken by the proper officer:
4.1.1 In case, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the said invoices of supplier have actually been made by the supplier to the said registered person and the tax on such supplies has been paid by the said supplier in his return in FORM GSTR 3B.
Certificate issued by CA or CMA shall contain UDIN.
UDIN of the certificate issued by CAs can be verified from ICAI website https://udin.icai.org/search-udin and that issued by CMAs can be verified from ICMAI website https://eicmai.in/udin/VerifyUDIN.aspx .
4.1.2 In cases, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on
WP(C) NO. 33214 OF 2023 6 said supplies has been paid by the said supplier in his return in FORM GSTR 3B.
4.2 However, it may be noted that for the period FY 2017-18, as per proviso to section 16(4) of CGST Act, the aforesaid relaxations shall not be applicable to the claim of ITC made in the FORM GSTR-3B return filed after the due date of furnishing return for the month of September, 2018 till the due date of furnishing return for March, 2019, if supplier had not furnished details of the said supply in his FORM GSTR-1 till the due date of furnishing FORM GSTR 1 for the month of March, 2019.” 3.
Para 5 of the Circular also clarifies that the Circular would be applicable in respect of bonafide errors committed in reporting during financial years 2017-18 and 2018-19 and the guidelines issued for reconciliation of the ITC claimed in FORM GSTR -3B and FORM GSTR – 2 and has reflected in FORM GSTR – 2A are clarificatory in nature and may be applied to the facts and circumstances of each case.
4.
it cannot be disputed that this is the case of initial year of implementation of GST regime. Several difficulties have been experienced by the assessees during the initial year of implementation of the GST. The Central Government has also realised these difficulties and, therefore, for initial years, i.e. for the
WP(C) NO. 33214 OF 2023 7 financial years 2017-18 and 2018-19, the Circular mentioned above has been issued to overcome the difficulties faced by the assessees while claiming the input tax credit for which the tax could not get reflected in FORM GSTR – 2A because of the facts as mentioned in the said Circular (Exhibit P-6).
5.
As per the Learned Counsel for the petitioner, the petitioner claim for input tax credit in its FORM GSTR – 3B was found to be incorrect as the tax paid by him for the supply received by him from M/s. T. V. Sundaram Iyengar & Sons Private Limited was not reflected in GSTR - 1 filed by the said supplier because of wrong GSTIN mentioned by the supplier dealer, and therefore, the petitioner is covered by Exhibit P-6 Circular and his claim cannot be denied if he is able to prove his claim for higher ITC by leading the evidences as mentioned in paragraph 4 of the said Circular. Learned Counsel for the petitioner has also placed reliance on the Judgment of this Court in the case of Diya Agencies v. State of Kerala and others (W.P.(C) No.29769 of 2023) dated 12.09.2023 wherein paragraph 8 of the Judgment it has been held as under;
WP(C) NO. 33214 OF 2023 8 “8.
In view thereof, I find that the impugned Exhibit P-1 assessment order so far denial of the input tax credit to the petitioner is not sustainable, and the matter is remanded back to the Assessing Officer to give opportunity to the petitioner for his claim for input tax credit. If on examination of the evidence submitted by the petitioner, the assessing officer is satisfied that the claim is bonafide and genuine, the petitioner should be given input tax credit. Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit. The assessing authority is therefore, directed to give an opportunity to the petitioner to give evidence in respect of his claim for input tax credit. The petitioner is directed to appear before the assessing authority within fifteen days with all evidence in his possession to prove his claim for higher claim of input tax credit. After examination of the evidence placed by the petitioner/assessee, the assessing authority will pass a fresh order in accordance with law.” 6.
Considering these facts and taking into consideration of Exhibit P-6 Circular, the present writ petition is allowed, the impugned orders; Exhibit P-2 recovery notice dated 05.09.2023 as well as Exhibit P-4 adjudication order dated 01.02.2022 are set aside, the matter is remanded back to the assessing authority to reconsider the case of the petitioner for input tax credit for the financial year 2017-18 in respect of the supply received by him from
WP(C) NO. 33214 OF 2023 9 M/s. T. V. Sundaram Iyengar & Sons Private Limited. However, the petitioner shall deposit 10% of the amount assessed within a period of fifteen days and appear before the Assessing Authority with all the documents and evidence in his possession for passing a fresh order. If on consideration of the evidence and materials and also Exhibit P-6 Circular and Exhibit p-7 Judgment, the Assessing Authority is of the opinion that the petitioner's claim for ITC for the financial year 2017-18 for the supply received by him from M/s. T. V.
Sundaram Iyengar & Sons Private Limited is not justified, the petitioner shall be liable to remit the remaining amount. The 10% of the amount assessed paid by the petitioner shall be subject to the final decision of the Assessing Authority. The petitioner shall appear before the Assessing Authority on 20.11.2023 at 11.00 am complying all the directions as above.
Sd/- DINESH KUMAR SINGH JUDGE Svn
WP(C) NO. 33214 OF 2023 10 APPENDIX OF WP(C) 33214/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE KSGST REGISTRATION CERTIFICATE IN FORM NO GST REG-06 DATED 18/4/2018 EXHIBIT 2 TRUE COPY OF THE RECOVERY NOTICE DATED 05-09-2023 ISSUED BY THE 4TH RESPONDENT WITH TRUE ENGLISH TRANSLATION EXHIBIT P3 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 24/02/2021 ISSUED BY THE 4TH RESPONDENT EXHIBIT P4 TRUE
COPY
OF
THE
ORDER
NO 32AARPE3407G1Z2/17-18/DRC07/1 DATED 01- 02-2022 ISSUED BY THE 4TH RESPONDENT EXHIBIT P5 TRUE COPY OF THE INVOICE DATED 31-08-2017 ISSUED BY T.V. SUNDRAM IYENGAR & SONS PRIVATE LTD. TO THE PETITIONER EXHIBIT P5(a) TRUE COPY OF THE THE LETTER DATED 16-12- 2021 ISSUED BY T.V. SUNDRAM IYENGAR & SONS PRIVATE LTD. TO THE PETITIONER EXHIBIT P6 TRUE COPY OF THE CIRCULAR NO 183/15/2022- GST DATED 27-12-2022 EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 12/9/2023 IN WP(C) 29769/2023 OF THIS HON'BLE COURT