2024 (5) TMI 1369 - HC - GST

Levy of GST on ocean freight - ITC for inward supplies - possession of the tax invoices - details of supplies not reflected in corresponding GSTR-2A - levy of penalty u/s 122(2)(a) of the CGST Act, read with Section 73(9) ibid. Non-possession of invoices - HELD THAT - The basic condition of eligibility to avail ITC is that the taxpayer should be in possession of a tax invoice or debit note issued by the supplier under the CGST Act or such other tax paying documents as may be prescribed. In this case, the taxpayer was not able to produce the impugned tax invoices to the audit officers for verification, during audit. Even along with their reply to the show cause notice, they enclosed only highly illegible copies of the invoices, with which their genuineness could not be ascertained - it is clear that the taxpayer was not in possession of the five invoices pointed out by the audit officers. The taxpayer's argument in this regard in their written reply and during the personal hearing was not relevant and does not hold good. Three invoices in respect of which the taxpayer had availed ITC, were not reflected in GSTR-2A - HELD THAT - The three invoices pointed out by audit were not reflected in GSTR-2A, during the time of audit. Even in their reply to the show cause notice, the taxpayer has not stated categorically that the invoices have populated in the GSTR-2A. During the personal bearing also, they were not able to prove that the concerned invoices had appeared in the GSTR-2A Hence, it is obvious that the concerned invoices have not been uploaded in their GSTR-1, by the respective suppliers, which means that GST has not been paid on the same. Therefore, as per Section 16(2) of the CGST Act, the taxpayer is not eligible for ITC in respect of the concerned three invoices. The submission of the learned counsel for the petitioner that credit was auto-populated in GSTR-2A also, is incorrect in view - Insofar as the demand in paragraph 13(a) (b) for a sum of Rs. 1,50,402/- towards IGST and interest thereon under Section 50(1) of the CGST Act, 2017 read with Section 73(1) of the CGST Act, 2017 and Section 20 of the IGST Act, 2017 is concerned, the issue is squarely covered in favour of the petitioner in terms of decision of the Hon'ble Supreme Court in UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR 2022 (5) TMI 968 - SUPREME COURT . This Writ Petition is partly allowed and partly dismissed.

Summary

Issues: Challenge to Order-in-Original on GST liability, ITC eligibility, and penalty imposition.

GST Liability: The petitioner contested an Order-in-Original demanding GST on ocean freight and ITC availed during a specific period. The court found the demand for GST on ocean freight to be covered by a Supreme Court judgment and ruled in favor of the petitioner, leading to the dismissal of this part of the demand.

ITC Eligibility: The court examined the petitioner's inability to produce clear invoices for ITC availed, noting discrepancies between GSTR-3B and GSTR-2A. The court upheld the demand for wrong availment of ITC and interest, as the petitioner failed to provide clear invoices, leading to the dismissal of this part of the demand.

Penalty Imposition: A penalty was imposed under relevant sections of the CGST Act for non-compliance. The court considered arguments from both sides but ultimately upheld the penalty imposition, dismissing the petitioner's contentions.

Judicial Review: The court partially allowed the Writ Petition, dismissing certain demands while upholding others. The petitioner was granted the liberty to file a statutory appeal within 30 days. The petitioner was also advised to obtain certificates from suppliers to support contingent invoices. The judgment concluded by closing the connected Miscellaneous Petition without costs.