2023 (8) TMI 974 - HC - GST

Levy of penalty u/s 122 - Initially demand of GST towards wrongful availing ITC paid without interest - Later interest u/s 50 was also paid - excess claim of input tax credit, which stood paid subsequent to a notice issued under the BGST Act - applicability of the decision in the case of PRICE WATERHOUSE COOPERS (P.) LTD. VERSUS COMMISSIONER OF INCOME-TAX, KOLKATA - I 2012 (9) TMI 775 - SUPREME COURT - HELD THAT - In the said decision, the Hon ble Supreme Court at the outset observed that the imposition of penalty in that case was not justified on the facts of the case. Therein, a provision for payment of gratuity was claimed as deduction, in the statement filed along with the return; which also contained a further statement that the same is not allowable. The Assessing Officer saddled the assessee with penalty at 300% of the tax sought to be evaded by furnishing inaccurate particulars. The Hon ble Supreme Court directed the assessee to file an affidavit and based on the explanation offered found the mistake committed to be silly mistake which also stood acknowledged by the Tribunal as well as by the High Court. On the particular facts, the Hon ble Supreme Court set aside the penalty imposed on the assessee under the Income Tax Act. In the present case, it is seen that the assessee has defaulted tax payment, based on an excessive claim of input tax credit, later deposited the input tax credit without interest due under Section 50; which attracted the penalty under Section 122 - it is already found that there can be no coercion found insofar as the deposit is concerned. The assessee, hence, has admitted the discrepancy with respect to excess claim of input tax credit and paid the amounts due on which interest was also due under Section 50 of the BGST Act. The non-payment of tax due and the failure to pay interest attracted the penalty imposed. The reliance on the Circular bearing F. No. CBIC-20001/2/2022- GST, in the facts of the present case is also not sustainable. The Circular was issued only to get over the difficulties in the nascent stage of the goods and services tax regime. There was a specific method provided by which input tax credit claims could have been sustained even if some discrepancies in the various returns filed were noticed. A procedure was stipulated under paragraph 4 by which the discrepancies could be rectified and the claim permitted by the Assessing Officer. The said procedure does not apply to the petitioner-assessee since he has admitted the allegation of excess claim and remitted the amounts due by way of tax. The petitioner - assessee has also not approached the Assessing Officer with the necessary evidence to substantiate the input tax credit; as provided in the Circular. In the present case, there is no proceeding of scrutiny or appeal pending and there cannot be any revision of the input tax credit since the allegation of excess claim has been admitted and differential amount paid by the assessee. The penalty levied was proper and a civil liability, attracted on the failure to pay the tax due, on a wrong claim of input tax credit. There are absolutely no reason to entertain the writ petition, the same is dismissed.

Summary

Issues Involved:
1. Imposition of interest and penalty on the assessee for excess claim of input tax credit under the Bihar Goods and Services Tax Act, 2017.
2. Availability of further remedy before the Tribunal not constituted under Section 109 of the BGST Act.
3. Discrepancies noticed during scrutiny of returns for the tax period July, 2017 to March, 2018.
4. Delay in filing the appeal before the first appellate authority and condonation of delay.
5. Applicability of the decision in Price Waterhouse Coopers Pvt. Ltd. v. Commissioner of Income Tax, Kolkata-I, (2012) 11 SCC 316 regarding penalty imposition.

Summary:
The petitioner, an assessee under the BGST Act, challenged the interest and penalty imposed for an excess claim of input tax credit. The petitioner contended that no excess claim was made and had invoices to support the claim, citing a Circular by the Government of India. The Government Advocate argued that discrepancies were found during scrutiny, leading to the imposition of interest and penalty. The petitioner admitted discrepancies in input tax credit and turnover, paying the differential amount under coercion. The delay in filing the appeal was addressed, noting the limitations set by the Supreme Court. The Court found no coercion in the payment made by the assessee and upheld the penalty for non-payment of due tax and interest. The Circular relied upon by the petitioner was deemed inapplicable as the excess claim was admitted and rectified. The Court dismissed the writ petition, upholding the penalty imposed on the assessee for the wrongful claim of input tax credit.