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2023 (4) TMI 309 - HC - GSTLevy of penalty - before filing of annual return, assessment made under Sub-Section 10 of Section 74 of CGST Act, 2017 - It is urged that the adjudicating authority, i.e. the respondent no.3 imposed penalty under Section 74 of CGST Act, 2017 which is contradictory and is a clear violation of principle of natural justice - HELD THAT - This court finds a clear contradiction in between the two orders i.e. the order dated 06.01.2021 passed by the respondent no.3, the adjudicating authority and the order dated 30.03.2022, passed by the respondent no.2, the appellate authority. Therefore, Section 74 of the CGST Act, 2017 will not apply in this case since no case has been made out in the show cause notice as well as in the impugned orders which are under challenge and the same are liable to be set aside and quashed. Accordingly, the impugned order dated 06.01.2021, passed by the respondent no.3 as well as the order dated 30.03.2022, passed by the respondent no.2 are hereby set aside and quashed - The matter is remanded back to the respondents authority concerned to decide afresh.
Issues involved:
The legality and validity of the order passed by the Additional Commissioner justifying the imposition of penalty under Section 129 of the CGST Act, 2017 and Tripura SGST Act, 2017, the contradiction in the imposition of penalty under Section 74 of the CGST Act, 2017, and the violation of the principle of natural justice. Judgment Summary: Challenge to Order by Additional Commissioner: The petitioner challenged the order passed by the Additional Commissioner justifying the penalty under Section 129 of the CGST Act, 2017 and Tripura SGST Act, 2017. The petitioner argued that the penalty imposed under Section 74 of the CGST Act, 2017 was contradictory and violated the principle of natural justice as no assessment could be made before the filing of the annual return. Factual Background: The petitioner claimed excess Input Tax Credit (ITC) in the return for July 2019, based on system reconciliation, but upon realizing the error, promptly reconciled the purchase records and reversed the excess ITC before any notice from the GST Department. The petitioner adjusted the reversed ITC against the outward GST liability in January 2020. Appellate Authority's Decision: The appellate authority upheld the penalty imposed by the adjudicating authority under Section 129 of the CGST Act, 2017 and Tripura SGST Act, 2017, despite the petitioner's argument that Section 74 of the CGST Act, 2017 was not applicable in this case. Respondent's Argument: The respondent contended that the petitioner availed excess ITC in July 2019, leading to a discrepancy between the claimed ITC and the actual invoices, which resulted in the initiation of investigation proceedings under Section 74 of the CGST Act, 2017. Court's Finding and Decision: The Court noted a contradiction between the orders of the adjudicating authority and the appellate authority. It held that Section 74 of the CGST Act, 2017 did not apply in this case as the show cause notice and impugned orders did not support its application. Consequently, the Court set aside and quashed the orders dated 06.01.2021 and 30.03.2022, remanding the matter back to the concerned authority for a fresh decision in accordance with the law. Conclusion: The writ petition was allowed, and the matter was disposed of accordingly.
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