Langkung Ragia vs. The Union Of INDIA And 5 Ors

WP(C)/223/2024HC GauhatiGSTCNR GAHC04000715202410 March 2025Bench: HONOURABLE MR. JUSTICE NELSON SAILO5 pages

AI SummaryRemanded

Facts

The petitioner, Langkung Ragia, proprietor of M/s Ragia Ku Enterprise, challenged a Demand-cum-Show Cause Notice dated 21.11.2023 issued by the Assistant Commissioner, CGST and CX, Itanagar Division. The notice demanded RGST, CGST, and SGST amounting to Rs 1,88,24,200.00 for the tax period of March 2019, availed and utilized after 20.10.2019, under Section 73(1) of the CGST Act. Despite the petitioner's reply, the Assistant Commissioner confirmed the demand and imposed a penalty of Rs 18,82,420/- under Section 73(9) read with Section 122(2)(a) of the CGST Act, 2017, by an order dated 22.04.2024. The petitioner is aggrieved by this order.

Held

The Court held that the impugned Demand-cum-Show Cause Notice dated 21.11.2023 and the consequential order in original dated 22.04.2024 are set aside. The reasoning was based on the submissions made by both parties acknowledging the amendment brought about by the Finance Act, 2024. The amendment to Section 16 of the CGST Act, as published in the Gazette of India on 16.08.2024, extended the time for availing input tax relief. The Court found merit in the petitioner's argument, supported by a previous Division Bench order, that this amendment should be considered. The ratio decidendi is that statutory amendments, particularly those extending time limits for tax benefits, should be given retrospective effect where applicable and should be considered by the authorities when passing orders. The operative direction was for the respondent authorities to reconsider and pass an appropriate order taking into account the provisions of Sub-Section (5) of Section 16 of the CGST Act, 2017, and the amendment to the Finance Act, 2024. No issue was expressly left undecided.

Key Issues

1. Whether the petitioner is entitled to avail input tax relief for the tax period of March 2019, considering the amendment to Section 16 of the CGST Act by the Finance Act, 2024, which extended the time limit for availing such relief? Petitioner's contention: The petitioner argued that Section 16 of the GST Act was amended by the Finance Act, 2024, published on 16.08.2024, extending the time prescribed for availing input tax relief to 30th November 2021. Therefore, the petitioner is entitled to this benefit. The petitioner also relied on a Division Bench order of the same High Court in WP(C) No. 470 (AP)/2022, which set aside similar orders based on the amendment to Section 16 of the CGST Act by the Finance Act, 2024. Revenue's contention: The learned standing counsel for CGST fairly submitted that in view of the amendment brought in by the Finance Act, the impugned Show Cause Notice and the orders in original cannot be sustained. The learned Dy.S.G.I. for respondent No. 1 agreed that the impugned Demand-cum-Show Cause Notice and the order in original cannot be sustained due to the amendment.

Sections Cited

Section 73, Section 73(1), Section 73(9), Section 122(2)(a), Section 16, Section 16(5)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Page No.# 1/5 GAHC040007152024 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) (ITANAGAR BENCH) Case No. : WP(C)/223/2024 Langkung Ragia Son of Langkung Asuk, proprietor of M/s Ragia Ku Enterprise, having their business at Narba Colony, ESS Sector, Ganga, Papumpare District, Arunachal Pradesh 791113 VERSUS The Union of India and 5 Ors represented by the Secretary, Govt of India, Ministry of Finance, Department of Revenue, North Block, New Delhi 110001 2:The Commissioner CGST adn CX Age: 0 Occupation : Itanagar Division Sector A Naharlagun Arunachal Pradesh 791110 3:The Assistant Commissioner Age: 0 Occupation : Central Goods and Service Tax Itanagar Division Sector A Naharlagun Arunachal Pradesh 791110 4:The Superintendent (Anti Evasion) Age: 0 Occupation : O/o Commissioner CGST and CX Itanagar Page No.# 2/5 Sector A Naharlagun Arunachal Pradesh 791110 5:The Central Board of Indirect Taxes and Customs Age: 0 Occupation : 1st Floor Tower NBCC Plaza 1 Sector 5 PushpVihar New Delhi 110017 6:The Chairperson Age: 0 Occupation : Goods and Services Tax Council 5th Floor Tower II Jeevan Bharti Building Janapath Road Connaught Place New Delhi 11000 Advocate for the Petitioner : Dakjum Riba, Advocate for the Respondent : Marto Kato, DSGI BEFORE HONOURABLE MR. JUSTICE NELSON SAILO

ORDER Date : 11.03.2025

Heard Ms. D. Riba, learned counsel for the petitioner. Also heard Mr. M. Kato, learned Dy.S.G.I. appearing for respondent No 1 and Mr. M. K. Boro, learned standing counsel for the CGST appearing for respondents No. 2 to 6. 2. By filing this writ petition, the petitioner has challenged the Demand-cum-

Page No.# 3/5 Show Cause Notice dated 21.11.2023 (Annexure-D) by which the petitioner has been asked to show cause as to why the amount of RGST, CGST and SGST amounting in aggregate to Rs 1,88,24,200.00 availed and utilised for the tax period of March, 2019 after 20.10.2019 should not be demanded and recovered under Section 73 (1) of the CGST Act. Although the petitioner replied to the Show Cause Notice, the Assistant Commissioner, CGST and CX Itanagar Division vide impugned order dated 22.04.2024, confirmed the demand notice and imposed a penalty of Rs 18,82,420/- on the petitioner in terms of Section 73(9) read with Section 122(2)(a) of CGST Act, 2017. Aggrieved, the petitioner is before this Court.

The learned counsel for the petitioner submits that although entitlement to take input tax relief in respect of any invoice or debit note, for supply of goods or services, has to be made before the 30th day of November following the end of the Financial Year to which such invoice or debit note pertains to, but Section 16 of the GST Act has been amended by the Finance Act, 2024, which was published in the Gazette of India on 16.08.2024, by which the time prescribed has been extended to 30th day of November 2021. Such being the position, the petitioner is entitled to avail the benefit of the input tax relief. She, therefore, submits that the impugned Demand-cum-Show Cause Notice and the orders in Page No.# 4/5 original should be set aside.

The learned counsel has also submitted that in a case of similar nature, a Division Bench of this Court vide order dated 16.09.2024, passed in WP(C) No. 470 (AP)/2022, taking into account the amendment of Section 16 of the CGST Act, had set aside the orders in original which was challenged in that case and the responding authorities were directed to consider and pass an appropriate order taking into consideration Sub-Section (5) of Section 16 of the CGST Act, 2017 vide amendment to the Finance Act, 2024, dated 16.08.2024. She, therefore, submits that a similar order may be passed in the instant case.

Mr. Boro, learned standing counsel for the CGST fairly submits that in view of the amendment brought in by the Finance Act, the impugned Show Cause Notice and the orders in original cannot be sustained.

Mr. M. Kato, learned Dy.S.G.I. submits that although the respondent No. 1 has nothing much to say in the matter, but in view of the amendment brought in by the Finance Act, he agrees that the impugned Demand-cum-Show Cause Notice and the order in original cannot be sustained.

Upon hearing the submissions made by the learned counsels for the parties and on perusal of the materials available on record and taking into account the amendment brought in by the Finance Act as stated herein above,

Page No.# 5/5 the impugned Demand-cum-Show Cause Notice, dated 21.11.2023 and the order in original, dated 22.04.2024 are hereby set aside. The respondent authorities are further directed to consider and pass appropriate order by taking into account the provisions of Sub-Section (5) of Section 16 of the CGST Act, 2017 and the amendment to the Finance Act, 2024

With the above observation and direction, this writ petition stands disposed of.

JUDGE Comparing Assistant

Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.