2022 (3) TMI 738 - HC - GST

Maintainability of petition - avoiding of pre-deposit - availability of alternative remedy of appeal - Input Tax Credit - HELD THAT - The impugned order clearly states that the petitioner has an alternate remedy before the Deputy Commissioner Goods and Service Tax. This writ petition appears to have been filed with a view to avoid pre-deposit while filing a statutory appeal before the Appellate authority under the provisions of the respective Goods and Service Tax Act. The pre-assessment notice dated 29.01.2021 clearly states that the petitioner is not entitled to avail input tax credit. There are no records to substantiate the case. There are several disputed question of facts. Prima facie there are no merits in the submission made by the learned counsel for the petitioner inasmuch as the notice was issued to the petitioner namely the pre-assessment notice and revision notice which seems to indicate that the petitioner had no documents to substantiate a valid availing of input tax credit. Mere reflection of the amounts in the Goods and Service Tax records electronically is not sufficient. If credit is to be allowed and adjusted on such transactions it would lead to unintended benefits being conferred. The petitioner has approached this Court long after the expiry of the limitation prescribed under the act to challenge the impugned order. The writ petition has been filed with a view to get over - the petitioner has an alternate remedy which has been deliberately not exercised by the petitioner - petition dismissed.

Summary

Issues:
Petitioner's entitlement to set off input tax credit against tax liability; Allegations of incorrect proceedings by the respondent; Availability of alternate remedy before the Deputy Commissioner, Goods and Service Tax; Delay in approaching the court challenging the impugned order.

Analysis:
The petitioner filed a writ petition seeking Certiorari and Mandamus to quash the respondent's proceedings in GSTIN and direct the adjustment of eligible ITC against tax liability for March 2018. The petitioner claimed to have earned input tax credit but faced system issues in setting it off against tax liability. Despite sending representations for rectification, the respondent issued pre-assessment and revised notices demanding payment. The petitioner argued that the impugned order was passed without jurisdiction and without considering their entitlement to set off the input tax credit.

The court considered arguments from both parties and noted that the impugned order mentioned the petitioner's alternate remedy before the Deputy Commissioner, Goods and Service Tax. It observed that the writ petition seemed to be an attempt to avoid pre-deposit for a statutory appeal. The court found that the petitioner failed to produce documents to substantiate inward supplies, leading to a lack of merit in their submission. The court emphasized the importance of validly availing input tax credit beyond mere electronic reflection in records to prevent unintended benefits. It also highlighted the delay in approaching the court after the expiry of the limitation period.

Despite the petitioner's failure to exercise the alternate remedy before the Deputy Commissioner, the court dismissed the writ petition with liberty for the petitioner to pursue the appropriate remedy within thirty days. The court directed the Deputy Commissioner to consider the appeal and pass orders in accordance with the law. The judgment concluded by dismissing the writ petition with no costs and closing the connected Miscellaneous Petition.