Veer Prabhu Marketing LTD. vs. Union Of INDIA

Held

The Court noted the subsequent developments presented by the respondents in their additional affidavit. These developments included the supplier, M/s Universal Auto Components, filing all its pending GSTR-3B returns. Consequently, the petitioner became entitled to avail Input Tax Credit (ITC) and did so in March 2021. Since the petitioner did not file any counter to the additional affidavit detailing these subsequent events, the Court found no further orders were required to be passed in the writ petition. The ratio decidendi is that when the underlying issue leading to a demand (supplier's non-filing) is rectified and the petitioner avails the benefit (ITC), the writ petition becomes infructuous. The Court disposed of the petition and all pending applications.

Facts

The petitioner, Veer Prabhu Marketing Ltd., was subjected to proceedings by the respondents (Union of India and GST authorities) for recovery/reversal of Rs. 25 lacs via DRC-03 dated 22.12.2020. This action was based on the supplier, M/s Universal Auto Components, failing to file GSTR-3B returns for the relevant periods. Subsequently, the supplier filed all pending GSTR-3B returns. Following this, the petitioner became entitled to avail Input Tax Credit (ITC) and applied for and availed it in March 2021. The respondents filed an additional affidavit detailing these subsequent developments, to which the petitioner did not file a counter.

Key Issues

1. Whether the petitioner is entitled to avail Input Tax Credit (ITC) when their supplier has subsequently filed all pending GSTR-3B returns, despite initial non-compliance? (Question of law) Petitioner's contention: The petitioner, through its authorized representative, implicitly argued that once the supplier rectifies the non-filing of GSTR-3B returns, the petitioner should be allowed to avail the eligible ITC. The fact that the petitioner later availed the ITC in March 2021 supports this position. Respondents' contention: The respondents initially initiated proceedings to recover Rs. 25 lacs due to the supplier's failure to file GSTR-3B returns. However, they later submitted an additional affidavit acknowledging that the supplier had filed the pending returns and the petitioner was entitled to avail ITC, which they subsequently did. They relied on the subsequent developments as a basis for the petition not requiring further orders.