M/S Okaya Power Private Limited vs. The Union Of INDIA

Held

The Court noted the petitioner's submission that the issues raised were factual and best suited for adjudication by the GST Tribunal, which functions as the second appellate authority under the CGST/BGST Act. The petitioner sought to withdraw the writ application to pursue this remedy before the Tribunal. The State's counsel did not object to this course of action. Consequently, the Court permitted the petitioner to withdraw the writ application with liberty to avail its remedy before the Tribunal as and when it is constituted, within the prescribed period of limitation and in accordance with law. The Court also noted the petitioner's request for an interim order of stay on recovery, to which the State informed that a stay application would be considered upon deposit of 10% of the demand. The writ application was disposed of accordingly.

Facts

M/s Okaya Power Private Limited (the petitioner) filed a writ petition before the Patna High Court. The respondent authorities, in compliance with a court order, filed a counter affidavit. Paragraph 8 of this counter affidavit detailed the findings of an adjudicating authority's verification of input tax credit (ITC) reversal claims by recipients of goods purportedly returned to the petitioner. The verification examined GST portal returns of these recipients. The authority found that most recipients had not reversed their ITC, with only M/s A.H. Enterprises and M/s I.I.N. Traders showing reversals of Rs. 5274.40 and Rs. 15409.00 respectively. The returns indicated zero ITC reversal for the remaining recipients, and annual returns (GSTR-9) also showed zero ITC reversal under relevant tables. The difference between ITC available and availed by recipients was negative in most cases, suggesting higher ITC availed than eligible.

Key Issues

1. Whether the factual dispute regarding the reversal of input tax credit by recipients of goods, as detailed in the counter affidavit, necessitates adjudication by the Goods and Services Tax (GST) Tribunal, which is the second appellate authority under the CGST/BGST Act? Petitioner's Contention: The petitioner argued that the matters raised, particularly the findings in paragraph 8 of the counter affidavit concerning the verification of ITC reversals, are factual in nature. Therefore, these issues should be adjudicated by the GST Tribunal, which serves as the second appellate authority under the CGST/BGST Act. The petitioner sought to withdraw the writ petition to pursue this remedy before the Tribunal. Revenue/State's Contention: The State's counsel (GP-7) had no objection to the petitioner availing the alternative statutory remedy before the Tribunal as provided under Section 112 of the CGST/BGST Act.