2023 (8) TMI 46 - HC - GST

Recovery of input tax credit - Transfer of unutilized ITC from one entity to another - Demand confirmed on the ground that the transfer of the said ITC has been accepted and availed by the petitioner through Form GST-33 instead of GST ITC-02 - period September 2017 to November 2017. It is the case of the petitioner that functionality for filing Form IT-02 was not available on the common portal. HELD THAT - The objections filed by the petitioner has not been considered by the respondent No. 2 and the order has been passed on technicalities. Shri Ankur Agarwal learned counsel appearing for the Respondent No.2 has vehemently argued in support of the impugned order. He submits that the averment of the petitioner to the effect that the objections have not been considered is ill founded inasmuch as the impugned order records that the objections have been filed and despite opportunity having been afforded to the petitioner for personal hearing the same was not availed by the petitioner. No irregularity or illegality can be attributable to the impugned order and the same is liable to be sustained. The petitioner has been non suited on the ground that Form ITC-02 for transfer of input tax credit was not available on the GST Portal which was in nascent stage during the initial months after its implementation on 01.07.2017 and it was incumbent upon the petitioner to have raised a proper grievance on the GST portal help-desk and ought to have waited for the relevant Form to go live on the GST portal instead of making illegal adjustment by use of the Form GSTR-3B of the transferor and the transferee company and mere shortage of working capital cannot be an excuse to bypass the legal procedure laid down under the law. The stand of the Respondent No.2 for rejecting the claim of the petitioner in the wake of the admitted fact that the GST common portal was not online cannot be justified - Petition disposed off.

Summary

Issues:
The legality, propriety, and correctness of the order confirming the demand and recovery of input tax credit (ITC) availed by the petitioner through Form GST-33 instead of GST ITC-02.

Details of the Judgment:
The petitioner, a registered Company providing internet services, transferred unutilized ITC balance as per Section 18(3) of the GST Act. The petitioner attempted to transfer the ITC following Rule 41 of the CGST Rules, 2017. However, the functionality for filing Form ITC-02 was not available on the common portal, which was communicated to the Assessing Authority. Facing working capital issues, the petitioner manually availed the ITC. Subsequently, a show cause notice was served, demanding differential ITC along with interest and penalty. The petitioner replied, requesting withdrawal of the notice, but the Respondent proceeded to confirm the demand without considering the reply.

Upon review, the Court found that the objections raised by the petitioner were not considered, and the order was passed on technicalities. The Respondent argued that objections were filed and a personal hearing opportunity was provided but not availed by the petitioner. However, the Court observed that the petitioner was non-suited due to the unavailability of Form ITC-02 on the GST Portal during the initial months of implementation. The Court held that the petitioner should have raised a grievance on the portal help-desk and waited for the relevant Form to go live instead of making an illegal adjustment. The Court set aside the order, directing the Respondent to pass a fresh order considering the objections and providing a hearing as per the law.

In conclusion, the writ petition was disposed of, with a direction for the petitioner to cooperate in the proceedings without unnecessary adjournments.