Laxmi Ghosh vs. State Of West Bengal And Ors.

Held

The Court held that the Appellate Authority's order was unsustainable. The Appellate Authority failed to provide a reasoned explanation as to why the petitioner's plea regarding the ITC claimed in GSTR-9 was considered "devoid of logic, facts & proper explanation." Furthermore, the Appellate Authority's observation that necessary documents and representation were absent appeared incorrect, as a written representation was indeed annexed to the writ petition. The Court also noted that the Appellate Authority did not explain why claiming ITC in GSTR-9 should not benefit the petitioner or be offset against the CGST and SGST demand. Consequently, the impugned order of the Appellate Authority was set aside. The matter was remanded to the Appellate Authority for fresh consideration in accordance with the law, allowing the petitioner to submit further representations. The Court explicitly stated it had not gone into the merits of the petitioner's entitlement.

Facts

The petitioner, Laxmi Ghosh, assails an order dated June 25, 2025, by the Appellate Authority under Section 107 of the WBGST Act, 2017, which dismissed her appeal against an order dated April 19, 2024, passed under Section 73 of the said Act. The petitioner had inadvertently failed to claim Input Tax Credit (ITC) for IGST for May, June, and July 2018 in her GSTR-3B returns. She later claimed this ITC in her annual return (GSTR-9) for 2018-19. A show-cause notice under Section 73 demanded CGST of Rs. 2,19,033.03 and SGST of Rs. 2,19,033.03 for the period April 2018 to March 2019, plus interest. The petitioner argued that claiming ITC of Rs. 3,54,457.99 in GSTR-9 should offset the demand, leaving her liable only for Rs. 83,608.07 plus interest.

Key Issues

1. Whether the Appellate Authority erred in dismissing the petitioner's appeal without properly considering the effect of ITC claimed in the annual return (GSTR-9) for the financial year 2018-19, contrary to the principle that annual returns are meant to rectify such omissions? (Section 44(1) read with Rule 80 of the CGST Act, 2017). 2. Whether the Appellate Authority's observation that the petitioner's plea was "devoid of logic, facts & proper explanation" and that necessary documents and representation were absent, was justified, especially when a written representation was annexed to the writ petition? Petitioner's arguments: The petitioner contended that the Appellate Authority failed to consider the ITC claimed in GSTR-9, rendering the purpose of filing annual returns redundant. She argued that the Appellate Authority's rejection was based on unsubstantiated claims of missing documents and representation, and that the ITC claimed in GSTR-9 should be offset against the departmental demand. Reliance was placed on the judgment in Pioneer Co-operative Car Parking Servicing and Constructions Society Ltd. Vs. State of West Bengal. Revenue's arguments: The judgment does not record any specific arguments made by the State/Revenue.