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2024 (2) TMI 234 - HC - GSTInput Tax Credit - the Integrated Goods and Service Tax (IGST) was not paid and NIL return had been filed by the seller but the petitioners had availed of input tax credit - suppression of facts or not - HELD THAT - In this case, it appears that there are invoices which indicate that the IGST was paid to the seller. However, there is nothing on record to show that the seller had either wilfully suppressed such payment made by the petitioners or that the petitioners had actually paid the amount to the seller as raised in the invoices. The facts which have been mentioned hereinabove and the documents which have been relied upon by the petitioners were not produced before the authorities. Rather, the petitioners, in the online mode, had made a request for reconsideration of the interest amount which gives rise to a presumption that the petitioners were willing to pay the other amounts, as claimed, with some reduction in the interest component. In the absence of any detailed letter of admission of the liability, it is difficult for this Court to understand the actual contentions of the petitioners before the authority. Prima facie, it appears that the press release has been violated by the respondents. The law has been settled by the Hon ble Division Bench in Suncraft Energy Private Limited 2023 (8) TMI 174 - CALCUTTA HIGH COURT . Before the authority proceeds against the buyer, the authority should first proceed against the seller and only if exceptional circumstances, as clarified in the press release issued by the Central Board of Indirect Taxes and Customs, can be made out in a particular case, the buyer can be proceeded against. This Court is of the view that the petitioners should be given a chance to approach the authority with all documents and contentions in respect of the demand raised - The order impugned dated August 21, 2023 which was passed on the assumption that no explanation had been offered by the petitioners, is set aside on the ground that the petitioners were not able to produce any explanation and documents at the hearing, which are now being relied upon by them. The writ petition disposed off.
Issues involved:
The judgment involves challenges to an order passed by the Assistant Commissioner of State Tax regarding the refund of input tax credit under the GST Act for a specific period. The petitioners argue that they should not be held responsible for the seller's non-compliance with tax laws. The petitioners rely on invoices and bank statements to support their claim. The judgment also refers to a previous case where the reversal of input tax credit was contested due to discrepancies in the supplier's returns. Details of the Judgment: Issue 1: Impugned Order and Input Tax Credit Refund The petitioners were directed to pay a sum under the GST Act for allegedly availing input tax credit without the Integrated Goods and Service Tax (IGST) being paid by the seller. The petitioners challenge the order, claiming that IGST was paid for each transaction as evidenced by invoices. Issue 2: Jurisdiction and Compliance The petitioners argue that the order is without jurisdiction and not in compliance with the statute and press releases of the Board. They assert that the alternative remedy of appeal does not prevent them from filing a writ petition. Issue 3: Reliance on Invoices and Bank Statements The petitioners rely on invoices showing IGST payments to the seller and bank statements confirming the transfer of the amount to the seller's account. Reference is made to a previous Division Bench decision in a similar matter. Issue 4: Precedent and Statutory Appeal A previous case where a similar writ petition was dismissed, directing the petitioners to pursue the statutory appeal route, is mentioned. Issue 5: Reversal of Input Tax Credit In a separate case, the reversal of input tax credit was contested due to discrepancies in the supplier's returns, leading to recovery notices issued to the appellant without proper enquiry against the supplier. Issue 6: Authority's Decision The Division Bench held that the authority cannot reverse input tax credit without taking action against the selling dealer, except in exceptional cases where the supplier is unable to remit the IGST amount. Conclusion: The judgment sets aside the impugned order and directs the authority to allow the petitioners to present all relevant documents and contentions. The authority is instructed to reconsider the matter, considering the petitioners' explanations and documents. The petitioners are given an opportunity to clarify their willingness to pay the demanded amount. The judgment emphasizes the need for proper adjudication based on all available information and compliance with legal procedures.
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