2024 (8) TMI 246 - HC - GST

Delay in availing the Input Tax Credit - Challenge to order in Form GST DRC-07 summarizing the demand - HELD THAT - The demand on account of the alleged delay in availing the Input Tax Credit purportedly comes to Rs. 23,35,892/- out of Rs. 57,12,114/-. If that being so, and if the submission of the petitioner is accepted, the aforesaid Input Tax Credit of Rs. 23,35,892/- is prima facie covered by the proposals in Clause 114 146 of the Finance (No.2) Bill, 2024 (Bill No.55 of 2024). It would require a detailed consideration. The impugned order to that extent is set aside and the case is remitted back to the third respondent to pass fresh order duly considering the proposals in the recommendation of the GST Council in its 53rd Meeting held on 22.06.2024 and the proposals in Clause 114 146 of the Finance (No.2) Bill, 2024 (Bill No.55 of 2024). As far as the balance amount of Rs. 33,76,222/- out of the confirmed demand of Rs. 57,12,114/- is concerned, a liberty is given to the petitioner to file a statutory appeal, within a period of thirty (30) days from today. Petition disposed off.

Summary

Issues:
Challenging impugned order dated 11.08.2021 in Form GST DRC-08.

Analysis:
1. The petitioner challenged the order dated 22.11.2019 confirming a demand of Rs. 66,88,378 under various heads, including tax due on turnover differences and income deductions. Penalty imposed under Section 74 of the TNGST Act, 2017 equaled the confirmed demand.
2. In an earlier round of litigation, the High Court set aside the order dated 03.01.2020 for lack of granting a personal hearing as required under Section 75(4) of the CGST Act, 2017. The case was remanded to the third respondent for a fresh order.
3. Subsequently, the petitioner received notices and a modified demand under Form GST DRC-01A. The petitioner responded to these notices, leading to the impugned order dated 11.08.2021 passed under Rule 142(7) of the TNGST Rules, 2017 in Form DRC 08.
4. During a personal hearing on 28.07.2021, the petitioner submitted documents and objections. The third respondent recalculated the demand based on turnover considerations under the GST regime, arriving at a revised tax liability.
5. A part of the demand related to delayed availing of Input Tax Credit, which the petitioner argued was addressed by the GST Council in its 53rd Meeting and proposed under the Finance (No.2) Bill, 2024. The Court acknowledged this issue and set aside the order to consider the proposals in the Bill.
6. The Court set aside the impugned order to the extent of the Input Tax Credit issue, remitting the case back to the third respondent for fresh consideration based on the Finance (No.2) Bill, 2024 proposals. The petitioner was granted liberty to file a statutory appeal for the remaining balance of the confirmed demand.
7. The Writ Petition was disposed of with no costs, and connected Miscellaneous Petitions were closed.