The division judge bench of the Patna High Court held that SGST and CGST can’t deemed to be paid as IGST without due compliance with the provisions of the taxation enactment.
Brief Facts:
The factual matrix of the case is that the petitioner is a partnership firm and is registered under the Bihar State Goods and Services Tax Act, 2017. The petitioner applied for the tender issued by the East Central Railways, for the sale of scrap and other such materials by way of an e-auction. Furthermore, the material worth Rs. 17 lakhs was taken by the Petitioner as a result of the auction and the invoice levied CGST and SGST at 9% each. The petitioner on the basis of the invoice paid the amounts and obtained possession of the materials. The petitioner seeks the correction of an invoice for the purpose of availing input tax credit.
Contentions of the Petitioner:
The Petitioner submitted that the petitioner's partners were unaware of the requirements, and it was only later when the tax consultant was informed of the delivery/sale invoice, that it was pointed out that because the goods were taken possession of in Jharkhand and moved out of the state, IGST was to be levied rather than CGST and SGST. Therefore, the present claim was raised.
Observations of the Court:
The court observed that According to the delivery/sale release order itself, the goods were delivered to Jharkhand, and the sale appears to be a local one. The goods were delivered to the petitioner in Jharkhand. The petitioner should have made it clear if they planned to transfer the materials outside of the state and demanded that the sale be handled as an interstate transaction. Despite the fact that the auction was held in Samastipur, the sale was to take place from Jharkhand, and it cannot be considered an inter-state sale unless there is a movement of goods outside the State.
It was furthermore observed that the petitioner is not permitted to request an input tax credit based solely on the Railways' claim that the invoice should be considered to have been issued in compliance with the IGST Act. In any case, the tax collected and levied as CGST and SGST would have been credited to the appropriate head of account. The transaction between the Railways and the petitioner would not regulate the tax liability. Parties to the transaction cannot agree that amounts paid as SGST and CGST will be considered paid as IGST if the taxation enactment's provisions are not properly followed.
It was noted that the invoice was issued during the 2017–18 assessment year. The writ petition was filed by the petitioner in 2021. In the month of September following the end of the financial year to which such an invoice relating to such a debit note pertains or the furnishing of the relevant annual return, whichever is earlier, Section 16(4) of the BGST Act permits the input tax credit to be taken in respect of any invoice or debit note, and in the case of a supplier, goods or services, or both, after the due date of furnishing of the return under Section 39. Thus, in order to receive the input tax credit, one must file the annual return by November 28, 2017, or furnish the annual return for the assessment year 2017-2018, whichever comes first.
Based on these considerations, the court was of the view that there is no possibility that the input tax credit can be availed.
The decision of the court:
With the above direction, the court held that there exists no reason to direct the railways to issue a revised invoice nor can the same be permitted. With this, the court dismissed the Writ petition.
Case Title: M/s. Vishwanath Iron Store Vs The Union of India
Coram: Hon’ble Mr. Justice K. Vinod Chandran, and Hon’ble Mr. Justice Rajiv Roy
Case No.: Civil Writ Jurisdiction Case No.1384 of 2021
Advocate for the Petitioner: Mr. Gautam Kumar Kejriwal, Advocate
Advocate for the Respondent: Dr. K. N. Singh, ASG Mr. Anshuman Singh, CGC.
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