2020 (3) TMI 976 - HC - GST

Denial of Input Tax Credit (ITC) - Tax paid u/s 129 after detention of goods alongwith the vehicle - part B of the e-way bill was not filled up - HELD THAT - This Court is of the considered view that the matter requires serious reconsideration at the hands of the 1st respondent as vital aspects enumerated in paras 15 and 16 of the Writ Petition (Civil) have not been duly considered and adverted to by the 1st respondent. Accordingly, for effectuating such a remit, it is ordered that the impugned Ext.P-5 order dated 21.11.2019 refusing to credit the abovesaid amount towards the GST registration number of the petitioner will stand quashed and the matter in relation thereto will stand remitted to the 1st respondent for consideration afresh. Petition disposed off.

Summary

Issues:
Detention of goods under Sec. 129 of the Act due to incomplete e-way bill, refusal to credit tax amount towards GST registration, interpretation of Section 17 (5) (i) regarding input tax credit.

Analysis:
The petitioner, an assessee to GST in Tamil Nadu, made an interstate supply to Kerala, but the goods were detained under Sec. 129 of the Act due to an incomplete e-way bill. The tax and penalty were collected from the petitioner, and a final order was issued. The petitioner sought to quash the order and requested the amount collected to be credited towards its GST registration. The petitioner argued that the respondent had a duty to credit the amount towards the petitioner's IGST liability, which was refused, leading to the filing of the Writ Petition.

The petitioner contended that the respondent's refusal to credit the amount towards the IGST liability was illegal and arbitrary. The petitioner also argued that Section 17 (5) (i) prohibits an assessee from taking credit of tax paid under Section 129, but the petitioner was not claiming input tax credit, only requesting a credit towards the output tax liability. The Court noted that the respondent had not duly considered the vital aspects raised by the petitioner in the Writ Petition and ordered a reconsideration of the matter by the respondent.

The Court quashed the order refusing to credit the amount towards the petitioner's GST registration and remitted the matter to the respondent for fresh consideration. The petitioner was directed to submit detailed written submissions within ten days, and the respondent was instructed to issue a notice for a hearing, consider the petitioner's contentions, and make a decision within six weeks from the date of the judgment. The Court emphasized that the decision should be taken without delay, considering the arguments raised by the petitioner in the Writ Petition.

In conclusion, the Court disposed of the Writ Petition, highlighting the need for the respondent to reconsider the matter in light of the petitioner's arguments and to make a decision regarding the credit of the amount collected from the petitioner towards its GST registration within a specified timeframe.