2024 (1) TMI 1103 - HC - GST

Input Tax Credit (ITC) claim - Denial of ITC for non-payment to suppliers exceeding 180 days - petitioner submits that the impugned order came to be issued on the basis of the total trade payables of the petitioner - HELD THAT - Under the Companies Act, 2013, every company is required to file financial statements in respect of its entire operations and there is no provision for filing State-specific financial statements. However, the petitioner has submitted a certificate from a Chartered Accountant stating that the trade payables attributable to the State of Tamil Nadu are Rs. 1816.48 millions. Learned counsel for the petitioner also submits that the petitioner would provide all the invoices issued by the suppliers with regard to the aggregate sum of Rs. 1816.48 millions. The assessing authority has clearly not applied its mind before drawing the conclusions - the impugned order is liable to be and is hereby quashed. Consequently, the matter is remanded for reconsideration by the assessing authority. Petition allowed by way of remand.

Summary

Issues involved: Challenge to an order regarding assessment year 2017-2018 under GST laws based on Input Tax Credit (ITC) and trade payables calculation.

Summary:
The petitioner, a registered person under GST laws, challenged an order concerning the assessment year 2017-2018, specifically related to the Input Tax Credit (ITC) claimed under Section 16 of the CGST Act. The petitioner had received a show cause notice regarding non-payment to suppliers exceeding 180 days, despite providing supporting documents including a Chartered Accountant's certificate. The impugned order was issued based on the total trade payables of the petitioner, as per the Assessing Authority.

Mrs. K. Vasanthamala, learned Government Advocate, argued that the total trade payables of the company were considered due to the petitioner's failure to provide a proper breakdown of net trade payables specific to the State of Tamil Nadu. The assessing officer concluded that the entire trade payables across India should be taken as trade payables due to the absence of Tamil Nadu financial statements from the petitioner.

The petitioner, however, submitted a certificate from a Chartered Accountant indicating trade payables attributable to the State of Tamil Nadu amounting to Rs. 1816.48 million. It was argued that the assessing authority did not properly consider the documents provided by the petitioner before issuing the impugned order.

The High Court quashed the impugned order, remanding the matter for reconsideration by the assessing authority. The authority was directed to review all relevant documents, provide a reasonable opportunity to the petitioner, and issue a fresh order within two months. The writ petition was allowed with no costs awarded, and connected Miscellaneous Petitions were closed.