M/S. Larsen & Toubro Limited vs. State Of West Bengal & Ors
Held
The Court held that the petitioner is not liable to pay interest as per the impugned communication dated May 2, 2018. This decision was based on the fact that the petitioner had admittedly not utilized the wrongly claimed ITC, but had reversed it. The Court considered the substituted provisions of Section 50(3) of the WBGST/CGST Act, 2017, which were given retrospective effect from July 1, 2017, by the Finance Act, 2022. The ratio decidendi is that interest under Section 50 of the WBGST Act, 2017, is not leviable on wrongly claimed ITC if it has not been utilized. Consequently, the writ petition was disposed of, and all legal consequences flowing from this decision were to follow.
Facts
The petitioner, M/s. Larsen & Toubro Limited, filed a writ petition challenging a communication dated May 2, 2018, issued by the State of West Bengal. This communication demanded payment of interest under Section 50 of the WBGST Act, 2017, on the grounds that the petitioner had wrongly claimed Input Tax Credit (ITC) of Rs. 18,36,39,830/-. The communication also noted that the petitioner had voluntarily paid this amount in DRC-3 as per Section 73(5) of the WBGST Act, 2017. The petitioner contended that interest is leviable only if ITC is wrongly claimed and utilized. In this case, the ITC was admittedly not utilized but was reversed.
Key Issues
1. Whether the petitioner is liable to pay interest under Section 50 of the WBGST Act, 2017, on ITC that was wrongly claimed but not utilized, considering the retrospective amendment to Section 50(3) of the said Act by the Finance Act, 2022. Petitioner's arguments: The petitioner argued that interest is only applicable if the wrongly claimed ITC has been utilized. They relied on the amended provisions of Section 50(3) of the WBGST/CGST Act, 2017, which were substituted by the Finance Act, 2022, with retrospective effect from July 1, 2017. Since the ITC in question was reversed and not utilized, they are not liable for interest. Revenue's arguments: The judgment does not record any specific arguments made by the State.
Sections Cited
Section 50, Section 73(5)
AI-generated summary — verify with the full judgment below
WPA 2654 OF 2020 13.12.2022
Sl no. 26
M/s. Larsen & Toubro Limited. Ct no. 2
- Vs - P.M.
State of West Bengal & Ors.
Mr. P. K. Das, Sr. Adv.,
Mr. Subrata Mukherjee
… for the petitioner
Mr. Anirban Ray, Ld. Govt. Pleader Md. T. M. Siddiqui
Mr. D. Ghosh,
Mr. N. Chatterjee
… for the State.
Heard learned advocates appearing for the parties. By this writ petition petitioner has challenged the impugned communication dated 2nd May, 2018 being annexure P/5 to the writ petition by which the petitioner has been asked to pay interest as per Section 50 of the WBGST Act, 2017 on the ground that the petitioner has wrongly claimed ITC under the WBGST Act, 2017 of an amount of Rs. 18,36,39,830/- and in the same communication it has been recorded that petitioner has made payment voluntarily in DRC 3 for the said amount as per provisions of Section73(5) of the WBGST Act, 2017. Petitioner submits that the criteria for claiming interest is that petitioner must have claimed ITC wrongly and must have utilized the same.
2 In the present case admittedly it has no
The judgment continues below.
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