Sri Badal Maity vs. Union Of INDIA And Anr
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The petitioner, Badal Maity, a registered taxpayer, received a scrutiny notice (Form GST ASMT-10) on September 22, 2022, indicating discrepancies in his returns. He failed to respond to this notice. Subsequently, a proceeding under Section 73 of the WBGST/CGST Act, 2017, was initiated via a show cause notice dated July 4, 2023, for the tax period July 1, 2017, to March 31, 2018. This led to an order dated December 7, 2023. The petitioner contended that this order was passed despite him having reversed Input Tax Credit (ITC), as evidenced by his Form GSTR-3B, a fact allegedly ignored by the proper officer. The State argued that the petitioner had an alternative remedy of appeal under Section 107 of the Act and should not have approached the High Court directly without exhausting this remedy.
Held
The Court did not delve into the merits of whether the petitioner had reversed ITC. Instead, it held that the petitioner should, in the first instance, approach the appellate authority under Section 107 of the WBGST/CGST Act, 2017. The Court directed that upon payment of Rs. 10,000/- towards costs to the GST authorities and filing the appeal along with the pre-deposit required under Section 107 within four weeks, the appellate authority shall hear and dispose of the appeal on its merits. The appellate authority is to consider the petitioner's contentions and pass a reasoned order within eight weeks of the order's communication. The Court explicitly stated that its observations were not to influence the appellate authority, which is free to decide the appeal on merits. The issue of whether ITC was reversed and the validity of the Section 73 order were expressly left to the appellate authority.
Key Issues
1. Whether the order passed under Section 73 of the WBGST/CGST Act, 2017, is liable to be set aside for ignoring the petitioner's reversal of ITC as reflected in Form GSTR-3B, and whether the petitioner should be permitted to respond to Form GST ASMT-10? (Mixed question of law and fact, turning on Section 73 and the principles of natural justice). Petitioner's contention: The order under Section 73 should be set aside because the proper officer ignored the fact that the petitioner had reversed ITC, which is evident from Form GSTR-3B. The petitioner should be allowed to respond to the initial scrutiny notice (Form GST ASMT-10). Revenue's contention: The petitioner has an alternative statutory remedy of appeal under Section 107 of the WBGST/CGST Act, 2017. The petitioner should exhaust this remedy before approaching the High Court. The proper officer cannot be faulted for passing the order as the petitioner did not respond to the show cause notice.
Sections Cited
Section 73, Section 107
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Cause title — parties, addresses and appearances
aforesaid order.
Mr. Roy Chowdhury, learned advocate appearing for the petitioner submits that this Court may be pleased to set aside the order passed under Section 73 of the said Act and permit the petitioner to respond to Form GST ASMT – 10. 5. Mr. Ray, learned Government Pleader submits that the petitioner has an alternative remedy in the form of an appeal under Section 107 of the said Act. According to him, the petitioner without exhausting such remedy should not be permitted to approach this Court. Admittedly, the petitioner did not respond to the show cause notice and as such, the proper officer cannot be faulted for having passed the aforesaid order.
Heard the learned advocates appearing for the respective parties and considered the materials on record.
It appears that the petitioner claims to have reversed the ITC by filing Form GSTR-3B. Unfortunately, as the petitioner did not file his response, the proper officer was not in a position to take into consideration the aforesaid.
Be that as it may, without going into the merits as to whether the petitioner had at all reversed the ITC, I am of the view that the petitioner, at the first instance, should approach the appellate authority under Section 107 of the said Act. In the event, the petitioner pays Rs.10,000/- with the GST authorities towards costs and files the appeal along with the pre deposit, as is required for maintaining
the appeal under Section 107 of the said within a period of 4 weeks from the date of this order, the appellate authority shall hear out and dispose of the appeal on merits by taking 2
into consideration the contentions of the petitioner by passing a reasoned order within a period of 8 weeks from the date of communication of this order.
It is made clear that this Court had not gone into the merits of the case and it shall be open to the appellate authority to hear out and dispose of the appeal on merits being uninfluenced by any of the observations made herein by this Court.
With the above observations and directions, the writ petition being WPA 15841 of 2024 is disposed of.
All parties shall act on the basis of server copy of this order duly downloaded from this Court’s official website. (Raja Basu Chowdhury, J.) 3
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.