Radha Mohan Purshottam Das Agarwal And Anr vs. The Assistant Commissioner Of State Tax,Jorabagan And Ors

Held

The Court held that the adjudication order dated 10th August, 2023, passed under Section 73(9) of the CGST Act, 2017/WBGST Act, 2017, was totally without jurisdiction and illegal. The reasoning was that the retrospective restoration of the appellant's VAT registration from 5th June, 2017, meant that the appellant was entitled to transitional credit. The authority's reliance on Section 140(1)(ii) of the WBGST Act, 2017, to deny credit based on non-furnishing of returns for the preceding period was flawed, especially after the retrospective restoration. The Court found the authority's conclusion that manual submission of statements in the form of returns cannot be accepted as returns, despite acknowledging the filing of monthly returns, to be an incorrect understanding of the legal position. The Court also noted that the authority sought to reopen a settled issue, which they were not entitled to do after the restoration of VAT registration. The ratio decidendi is that retrospective restoration of registration entitles the assessee to transitional credit, and denial of such credit based on pre-restoration non-compliance is illegal. The appeal, connected application, and writ petition were allowed, and the impugned orders were quashed.

Facts

The appellants, M/s. Radha Mohan Purshottam Das Agarwal & Anr., are challenging an order dated 25th September, 2023, passed by a Single Bench of the High Court, which declined to grant an interim order. This appeal stems from a previous writ petition (WPA 21076 of 2023). Earlier, in MAT 151 of 2023, the appellants had challenged the retrospective cancellation of their VAT registration. That appeal was allowed, with directions to the Original Authority to re-hear the application for restoration of VAT registration. Following this, the VAT registration was restored retrospectively from 5th June, 2017. Subsequently, the Assistant Commissioner of State Tax issued a show cause notice under Section 73(1) of the CGST Act, 2017/WBGST Act, 2017, alleging that transitional credit was not permissible due to non-furnishing of returns under the existing law for the six months preceding the appointed date, referencing Section 140(1)(ii) of the WBGST Act, 2017. An adjudication order dated 10th August, 2023, was passed under Section 73(9) of the CGST Act, 2017/WBGST Act, 2017, which was the subject of the writ petition.

Key Issues

1. Whether the adjudication order dated 10th August, 2023, passed under Section 73(9) of the CGST Act, 2017/WBGST Act, 2017, is without jurisdiction and illegal, considering the retrospective restoration of the appellant's VAT registration and their entitlement to transitional credit. Contentions: Petitioner/Appellant: Argued that the adjudication order is illegal and without jurisdiction. They contended that after their VAT registration was restored retrospectively, they became entitled to transitional credit. They further argued that the authority wrongly relied on Section 140(1)(ii) of the WBGST Act, 2017, as the retrospective restoration negated the condition of non-furnishing of returns for the preceding period. They also submitted that the authority illegally reopened a settled issue and wrongly concluded that manual submission of statements in the form of returns cannot be accepted as returns, despite acknowledging the filing of monthly returns. Revenue/State: The judgment records no specific arguments made by the State.