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2025 (2) TMI 347 - HC - GSTConstitutional validity of the retrospective amendment of Rule 61 of the WBGST Rules 2017 and the omission of Rule 61(6) - entitlement to claim ITC - discrepancies between GSTR-3B and GSTR-2A returns - HELD THAT - Section 44 of the Act deals with annual returns which states that every registered person other than an input tax distributor a person paying tax under Section 51 or Section 52 shall furnish an annual return which may include a self-certified reconciliation statement reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement for every financial year electronically within such time and in such form and in such manner as may be prescribed - the word reconciliation used in the statute could lead to the meaning that there can be a rectification of any error which might have occurred when the taxpayer files his return in FORM GSTR-3B. More or less an identical issue was considered by this court in Ankit Kumar Agarwal Proprietor of business namely Ambika Trading Company v. The Assistant Commissioner of State Tax Taltala Charge Ors. 2024 (5) TMI 1188 - CALCUTTA HIGH COURT - After considering the facts of the said case the court held that if GSTR-9 which was filed within the time permitted is not considered the assessee s right would be seriously prejudiced. It is no doubt true that in the said decision which was held that the decision should not be treated as a precedent. Nonetheless the court considered the effect of GSTR-9 which being an annual return which could be filed within the extended period of limitation on account of various notifications issued by the Government. The adjudicating authority ought to have considered the effect of GSTR-9 and the particulars furnished therein rather than to say that what was claimed in the annual return was not reflected in the return filed under GSTR-3B. This would be the proper manner in which the case had to be dealt with otherwise the purpose of filing an annual return in terms of Section 44(1) of the Act read with Rule 80 would become redundant. Conclusion - The matter has to be readjudicated afresh after considering the GSTR-9 the annual return filed by the appellant in FORM GSTR-9. It is for the appellant/assessee to establish that they voluntarily paid Rs.6, 20, 322.00 at the time of filing the GSTR-9 since the adjudicating authority has recorded that no document was furnished to support such claim and it is not reflected in the GST BO portal. Appeal allowed by way of remand.
1. ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Constitutionality of Retrospective Amendment and Omission of Rules: The appellant initially challenged the constitutional validity of the retrospective amendment of Rule 61 and the omission of Rule 61(6) of the WBGST Rules, 2017. However, during the proceedings, the appellant chose not to press this issue, focusing instead on the correctness of the adjudication order. Correctness of the Adjudication Order: The legal framework involves Section 73(9) of the CGST/WBGST Act, 2017, which pertains to the determination of tax, interest, and penalties. The appellant contested the adjudication order, arguing that it was erroneous due to the retrospective amendment of Rule 61 and the omission of Rule 61(6). The Court considered the appellant's submission that the order was incorrect and examined the relevant statutory provisions. Entitlement to Input Tax Credit (ITC): The appellant claimed ITC based on a reconciliation statement, which showed discrepancies between amounts in GSTR-3B and GSTR-2A. The adjudicating authority disallowed ITC claims not reflected in GSTR-2A, citing Section 16(4) of the Act. The appellant argued that they rendered services to Indian Railways, which delayed filing returns, affecting ITC claims. The Court noted that the appellant's reconciliation statement was not accepted due to lack of supporting documentation. Consideration of FORM GSTR-9: The appellant contended that the non-notification of FORM GSTR-3 for the relevant period prevented them from filing it, and thus, their annual return in FORM GSTR-9 should be considered. The Court analyzed Section 39 and Rule 61, noting that the time limit for filing FORM GSTR-3 was not notified. The Court emphasized that technicalities should not deny lawful ITC entitlement if the appellant complied with statutory conditions. The Court referenced previous cases where GSTR-9 was considered despite discrepancies in GSTR-3B. Voluntary Payment Claim: The appellant claimed to have voluntarily paid Rs. 6,20,322.00, but the adjudicating authority found no supporting documentation. The Court noted that the appellant must establish this payment with appropriate evidence, which they claimed to possess. 3. SIGNIFICANT HOLDINGS The Court held that the matter should be re-adjudicated, emphasizing the importance of considering the appellant's annual return in FORM GSTR-9. The Court stated: "If the assessee has complied with the requisite conditions under the provisions of the Act and Rules and is lawfully entitled to the input tax credit, the same should not be denied on technicalities." The Court concluded that the adjudicating authority should not ignore the annual return while considering ITC claims. The Court remanded the matter to the adjudicating authority for fresh consideration, instructing them to examine the appellant's GSTR-9 return and all aspects on merits and in accordance with the law. The decision underscores the principle that taxpayers should not be disadvantaged due to procedural technicalities when statutory forms are not notified.
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