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TMI Blog2024 (2) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... terest Act, 2002 read with Security Interest (Enforcement) Rules, 2002 - on this short point alone impugned orders are liable to be set aside and the cases have remitted back to the 1st respondent to pass fresh orders on merits after giving the petitioner an opportunity to cross examine the officers of the 2 nd respondent and after being heard. Denial of transitional credit under the aforesaid provisions of the respective GST Enactments can be justified only if the petitioner did not have unutilised credit of Rs. 10,83,115/- as on 30.6.2017. This would have been reflected in the Returns of the petitioner which the petitioner would have filed before the Commercial Tax Department under the provisions of the Tamil Nadu Value Added Tax Act, 2006. This aspect can be verified by the Department by drawing informations from its archives under the provisions of the Tamil Nadu Value Added Tax Act, 2006 - Proviso to Section 16 (2) of the Tamil Nadu Goods and Service Tax Act, 2017 and the Central Goods and Service Tax Act, 2017 contemplates that where a recipient fails to pay the supplier of the goods or services or both, other than the supply on which tax is payable on reverse charge basis, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Assessment Years 2017-2018 & 2018-2019. 2. Considering the fact that the petitioner has filed a composite writ petition, Court had given liberty to the petitioner to file a separate writ petition for the separate Assessment Year 2018-19, so that separate orders can be passed based on the available records that have been filed by the petitioner for the Assessment Year 2017-2018 in W.P. No. 11637 of 2020, if required. Thus, W.P. No. 27562 of 2023 was filed later by the petitioner. 3. The Impugned Orders both dated 05.05.2020 for the Assessment Years 2017-2018 & 2018-2019 preceded a Show Cause Notice dated 20.11.2019 bearing reference: GSTIN: 33ALPPS1578K1ZG/2017-2018 under Section 74(1) of the Central Goods & Services Tax Act, 2017 (CGST Act, 2017) and Tamil Nadu Goods and Service Tax Act, 2017 (TNGST Act, 2017). Relevant portion of the Show Cause Notice dated 20.11.2019 reads as under:- "As per the order of the Joint Commissioner (ST) (Intelligence), Erode vide reference 1st cited, your place of business was visited on 27.09.2019 for inspection, and ascertained that your business premises was held under the custody of Tvl. Kotak Mahindra Bank Limited, Coimbatore for their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 233577 233577 Oct.17 142853 91955 91955 326763 15.02.2018 643 60397 38878 38878 Nov.17 71719 96597 96597 264913 15.02.2018 643 30322 40841 40841 Dec.17 277200 721556 721556 1720312 15.02.2018 643 117199 305070 305070 Jan.18 55100 921349 921349 1897798 31.03.2018 600 21738 363491 363491 Feb.18 0 693787 693787 1387574 31.03.2018 600 0 273713 273713 Mar.18 2806 530253 530253 1063312 18.02.2019 276 509 96230 96230 Total 656950 3654900 3654900 7966750 283836 1399109 1399109 30,82,053 TRAN-1-ITC Table-3 Month IGST CGST SGST TOTAL Date of Filing No of days Interest @ 24% IGST CGST SGST July.17 0 0 1083115 1083115 20.08.2017 815 0 0 580431 5,80,431 Total amount of Interest = Rs. 30,82,053/- + Rs. 5,80,431/- =Rs. 36,62,484/- Penalty is also proposed to be levied at 100% on the tax dues as per Section 74(1) of TNGST Act, 2017 Total Tax dues = Rs. 79,66,750 + Rs. 10,83,115 = Rs. 90,49,865.00 @ 100% Penalty due = Rs. 90,49,865.00. Hence, you are requested to pay the amount of Rs. 90,49,865 with interest and Penalty within 30 days from the date of receipt of this notice. Objection if any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents in not complying with the requirements of Section 67 of the TNGST Act, 2017 during the visit made on 08.11.2019 in absence of the petitioner. 12. It was further stated by the petitioner that in terms of Section 71(1) of the TNGST Act, 2017 that any officer authorized by a proper officer not below the rank of Joint Commissioner can have access to any place of business of a registered person to inspect books of account, documents, computers, computer programs, computer software whether installed in a computer or otherwise and such other things as he may require and which may be available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. 13. It is submitted that sub-clause(2) to Section 71 of the TNGST Act, 2017 contemplates safeguards for the following:- i. Such records as prepared or maintained by the registered person and declared to the proper officer in such manner as may be prescribed; ii. Trial balance or its equivalent; iii. Statements of annual financial accounts, duly audited, wherever required; iv. Cost audit report, if any, under Section 148 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to reverse the input tax credit which was availed by the petitioner for the Assessment year 2017-2018 along with interest on or before 16.03.2020 and that penalty was also imposed under Section 74(1) of the respective Act for willful default of wrong input tax credit. 20. It is further submitted that despite the officials of the second respondent, being summoned for cross-examination also, the petitioner was not allowed to cross examine them. It is submitted that if cross-examination was allowed, the petitioner would have established that all the documents for proving that Input Tax Credit on invoices were validly availed for deciding the tax liability. 21. In this connection, the learned counsel for the petitioner has also drawn attention to Paragraph 21 of the counter affidavit filed in support of the first respondent, wherein, it has been wrongly stated that on 08.11.2019 officials from the Intelligence Department verified the records and took with them certain documents and acknowledged the same in GST INS-02. 22. The learned counsel for the petitioner has placed reliance on the following decisions:- i. Commissioner of Income Tax vs. Dharam Pal Prem Chand Limited, MANU/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve period, Input Tax Credit that was availed by the petitioner was liable to be reversed and consequently tax was payable in cash together with interest. 29. The learned counsel for the second respondent further submits that since the officials have taken away the required documents pertaining to the petitioner from the Secured Asset on 08.11.2019 and also heard from second respondent on their personal appearance before the authority as per their own show cause notice dated 07.01.2010, the adjudicating authority revoked the order of cross examination of the witness of the second respondent. 30. On a perusal of the allegation made by the petitioner in paragraph 3D and 6F are read together, it would be clear that the petitioner is making false allegations before this Court. In paragraph 3D, no Panchanama was prepared and executed at the time of taking possession by the second respondent submitted the Panchanama on 27.02.2020. Thus, it is very clear that the petitioner is making contradictory statements in the affidavit. 31. It is further submitted that the petitioner is not aware of the movables that are present in the premises. As aforesaid, when the officials of the first respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST 2017 and TNGST 2017 for a sum of Rs. 79,66,750/-as detailed in the show cause notice content of which has been extracted above in Table-1. 38. Apart from the input tax credit, the petitioner has also availed a transitional credit of the Value Added Tax lying unutilize, in terms of Section 141 and 142 of the TNGST 2017 for a sum of Rs. 10,83,115/- 39. In all, a sum of Rs. 90,49,865/- was sought to be denied to the petitioner in the show cause notice that was issued to the petitioner on 20.11.2019. Apart from the input tax credit and transitional credit on the aforesaid amounts, the show cause notice issued also proposed to levy interest under the provisions of the respective GST Enactments for the Assessment Year 2017-18. 40. Denial of transitional credit under the aforesaid provisions of the respective GST Enactments can be justified only if the petitioner did not have unutilised credit of Rs. 10,83,115/- as on 30.6.2017. This would have been reflected in the Returns of the petitioner which the petitioner would have filed before the Commercial Tax Department under the provisions of the Tamil Nadu Value Added Tax Act, 2006. This aspect can be verified by the Department by d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies of goods or services or both received during a tax period under Sub-section (2) of the respective GST Enactments of Section 38, on the basis of the details contained in Part-A , Part B and Part C of Form GSTR-2A , and would have prepared such details as specified in Sub-Section 1 of Section 38 of the respective GST Enactments and furnished the same in GSTR-2 electronically through the common portal, either directly or from the facilitation Centre notified by the Commissioner, after including therein the details of such other input supplies, if any, required to be furnished under Section 38 (2) of the respective GST enactments. 48. As the registered person, the petitioner would have furnished the details under Section 38 (5) of the respective GST Enactments in form in GSTR-2. Through the common portal after the due date of filing of form GSTR-1. 49. Rules 59 & 60 of the respective GST Enactments as they stood during the period in dispute are reproduced below:-. Rule 59 of the Central Goods and Service Tax Rules, and Tamil Nadu Goods and Service Tax Rules, 2017 Rule 60 of the Central Goods and Service Tax Rules, 2017 and Tamil Nadu Goods and Service Tax Rules, 2017 (1) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l include the - (a) invoice wise details of inter-State and intra-State supplies made to the registered persons; (b) debit and credit notes, if any, issued during the month for such invoices issued previously.]133] [(6) Notwithstanding anything contained in this rule, - (a) a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for preceding two months; (b) a registered person, required to furnish return for every quarter under the proviso to subsection (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period; (3) The details of outward supplies furnished using the IFF, for the first and second months of a quarter, shall not be furnished in FORM GSTR-1 for the said quarter. [60. Form and manner of ascertaining details of inward supplies.- (1) The details of outward supplies furnished by the supplier in FORM GSTR-1 or using the IF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nth of the quarter, between the day immediately after the due date of furnishing of FORM GSTR-1 for the preceding quarter to the due date of furnishing details using the IFF for the first month of the quarter; (b) for the second month of the quarter, between the day immediately after the due date of furnishing details using the IFF for the first month of the quarter to the due date of furnishing details using the IFF for the second month of the quarter; (c) for the third month of the quarter, between the day immediately after the due date of furnishing of details using the IFF for the second month of the quarter to the due date of furnishing of FORM (iii) the details of the integrated tax paid on the import of goods or goods brought in the domestic Tariff Area from Special Economic Zone unit or a Special Economic Zone developer on a bill of entry in the month. (8) The Statement in FORM GSTR-2B for every month shall be made available to the registered person,- (i) for the first and second month of a quarter, a day after the due date of furnishing of details of outward supplies for the said month, in the IFF by a registered person required to furnish return for every quarter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.;] Eligibility and conditions for taking input tax credit. (c) subject to the provisions of 2 [section 41 or Section 43A], the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of issue of the invoice. This would require verification for the electronic records of the petitioner. Rule 37 of the Central, Goods and Service Tax Rules 2017 and Tamil Nadu Goods and Service Tax Rules, 2017 are reproduced below:- Rule 37 of the Central, Goods and Service Tax Rules 2017 Tamil Nadu Goods and Service Tax Rules, 2017 37. Reversal of input tax credit in the case of non-payment of consideration.- (1) A registered person, who has availed of input tax credit on any inward supply of goods or services or both, but fails to pay to the supplier thereof, the value of such supply along with the tax payable thereon, within the time limit specified in the second proviso to sub-section (2) of section 16, shall furnish the details of such supply, the amount of value not paid and the amount of input tax credit availed of proportionate to such amount not paid to the supplier in FORM GSTR-2 for the month immediately following the period of one hundred and eighty days from the date of the issue of the invoice: Provided that the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purposes of the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be liable to pay interest at the rate notified under sub-section (1) of section 50 for the period starting from the date of availing credit on such supplies till the date when the amount added to the output tax liability, as mentioned in sub-rule (2), is paid. (4) The time limit specified in sub-section (4) of section 16 shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of this Chapter, that had been reversed earlier. 53. If the petitioner has not paid the amount as is contemplated under 2nd proviso to Section 16 (2) of the respective GST enactments, the respondent will be justified in demanding credit availed notwithstanding the fact that the cross-examination of the officers of the 2nd respondent was denied. 54. Therefore, notwithstanding the non-availability of the documents such as invoices and the manual registers, the petitioner would be entitled to input tax credit as also transitional credit if they were validly availed provided the details were captured and available in the system both at the end of the petitioner and the supplier and in the information furnished by the petitioner in various GST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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