Cvv Trading Company vs Assistant Commissioner Of State ...
2023 Latest Caselaw 10354 Ker

                IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
             THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
         FRIDAY, THE 29TH DAY OF SEPTEMBER 2023 / 7TH ASWINA, 1945
                          WP(C) NO. 31056 OF 2023
PETITIONER/S:

             ANAZ ABDUL RAHIMAN KUTTY, AGED 43 YEARS
             NAS MEDICALS, PRATHANGAMOOD JN, KAYAMKULAM, ALAPPUZHA
             DISTRICT., PIN - 690502

             BY ADVS. K.N.SREEKUMARAN
             P.J.ANILKUMAR (A-1768); N.SANTHOSHKUMAR



RESPONDENT/S:

     1       STATE TAX OFFICER, STATE GOODS & SERVICES TAX DEPARTMENT,
             KAYAMKULAM, PIN - 690502

     2       STATE TAX OFFICER (ARREAR RECOVERY)
             O/O. THE JOINT COMMISSIONER, TAX PAYER SERVICES, STATE
             GOODS & SERVICE TAX DEPARTMENT, ALAPPUZHA., PIN - 688001

     3       STATE OF KERALA REPRESENTED BY ADDITIONAL CHIEF SECRETARY
             (TAXES), GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.,
             PIN - 695001

     4       UNION OF INDIA, REPRESENTED BY ITS SECRETARY
             DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT
             OF INDIA, NORTH BLOCK, NEW DELHI., PIN - 110001

             RESHMITA RAMACHANDRAN-GP


         THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
29.09.2023, ALONG WITH WP(C).31026/2023, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
 W.P.(C) No.31056 & 31026/2023
                                           -2-




                IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
             THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
         FRIDAY, THE 29TH DAY OF SEPTEMBER 2023 / 7TH ASWINA, 1945
                          WP(C) NO. 31026 OF 2023
PETITIONER/S:

             CVV TRADING COMPANY, 16/239, C.V. TRADING COMPANY,
             MUDAVOOR, ERNAKULAM, (REPRESENTED BY SRI. C.V. MATHAI,
             MANAGING PARTNER), PIN - 686669

             BY ADVS. K.N.SREEKUMARAN
             P.J.ANILKUMAR (A-1768); N.SANTHOSHKUMAR


RESPONDENT/S:

     1       ASSISTANT COMMISSIONER OF STATE TAX, (RE-DESIGNATED AS
             DEPUTY COMMISSIONER)
             STATE GOODS & SERVICES TAX DEPARTMENT, SPECIAL CIRCLE AT
             MINI CIVIL STATION, PERUMBAVOOR, PIN - 683542

     2       DEPUTY COMMISSIONER OF STATE TAX (ARREAR RECOVERY)
             TAX PAYER SERVICES, STATE GOODS & SERVICE TAX DEPARTMENT,
             MINI CIVIL STATION, ALULA, PIN - 683101

     3       STATE OF KERALA REPRESENTED BY ADDITIONAL CHIEF SECRETARY
             (TAXES), GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM,
             PIN - 695001

     4       UNION OF INDIA, REPRESENTED BY ITS SECRETARY
             DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT
             OF INDIA, NORTH BLOCK, NEW DELHI, PIN - 110001

             RESHMITA RAMACHANDRAN-GP


         THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
29.09.2023, ALONG WITH WP(C).31056/2023, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
 W.P.(C) No.31056 & 31026/2023
                                    -3-




                           JUDGMENT

[WP(C) Nos.31056/2023, 31026/2023]

WPC 31056/2023

The present writ petition under Article 226 of the

Constitution of India has been filed by the petitioner

impugning the Exts.P1, P2 and P3.

2. The petitioner is a registered dealer under the

provisions of the CGST/SGST Act. The petitioner had filed

monthly returns GSTR 3B for the Assessment Year 2017-18. On

scrutiny of the monthly return filed by the petitioner, certain

discrepancies were noticed, which were communicated to the

petitioner through notice in Form GST ASMT 10 as per Rule

99(1) of the GST Rules. The petitioner was directed to furnish

a reply along with proof of payment of tax and interest

quantified in the notice sent in Form GST ASMT 10 within a

period of thirty days from the receipt of the notice. It has been W.P.(C) No.31056 & 31026/2023

observed that the petitioner neither filed any reply nor

remitted the tax and interest on or after the due date. An

intimation as per Rule 142(1A) of the SGST/CGST Rules in Form

GST DRC-01A determining the tax ascertained, payable under

Section 73(5) of the Act, along with the defects found in the

return of the scrutiny was communicated to the petitioner.

The petitioner was directed to pay the said amount of tax as

ascertained, along with the applicable interest in full by

27.01.2021, failing which show cause notice will be issued

under Section 73(1). The petitioner was given an opportunity

to file any objection or submission against the intimation.

However, the petitioner neither remitted the tax and interest

demanded in DRC 01A nor filed any objections to the tax

ascertained.

2.1 In the circumstances, notice under Section 73(1) of

the SGST/CGST Act along with DRC 01 was issued to the

petitioner. The assessment Order would note that said notice W.P.(C) No.31056 & 31026/2023

was also delivered to the petitioner through a special

messenger. However, the petitioner did not produce any

documentary proof to support his claim, nor did he produce

the cash book/ day Book, inward supply register, inward

supply bills, outward supply register, outward supply bills,

stock register and other documents as demanded. In view

thereof, considering the difference between GSTR 2A and 3B,

the input tax credit claim of the petitioner to the extent of

Rs.1,26,281/- under the SGST and the same amount under the

CGST were disallowed. The Assessing Authority has levied

interest of Rs.1,03,315/- under the CGST and the same amount

under the SGST, and Rs.12,628/- each penalty has been

imposed under the CGST and SGST. The total tax, interest and

penalty has been assessed at Rs.4,84,448/-.

3. The learned Counsel for the petitioner submits that

it was the initial period of the implementation of the GST

regime. The petitioner and other small dealers were facing a W.P.(C) No.31056 & 31026/2023

lot of difficulty. In fact, the supplier dealers have paid the tax

for which the petitioner had claimed an input tax credit, and

the petitioner has all the evidence to support his claim. The

petitioner should be granted one opportunity before the

Assessing Authority to produce all the documents to support

his claim regarding his claim for the input tax credit to extent

of Rs.4,84,448/-

4. Ms Rasmitha Ramachandran has, however, opposed

this prayer and submits that the petitioner was served with

the notice, and he chose not to respond to the notice. There

was compliance of the provisions of the Act and the principle

of natural justice. Therefore, this petition is liable to be

dismissed.

5. I have considered the submissions.

5.1 The period involved is 2017-18 when the GST

regime was rolled out. There may be some substance in the

submission of the learned Counsel for the petitioner that the W.P.(C) No.31056 & 31026/2023

petitioner faced enormous difficulty in understanding the

provisions of the GST Act. He also submits that the tax has

been paid to the Government. Therefore, the Government is

not at a loss for which the petitioner's claim for input tax claim

has been disallowed.

5.2 Considering these aforesaid facts, the impugned

order to the extent of disallowing the input tax credit of

Rs.4,84,448/- is set aside. The petitioner is directed to appear

before the State Tax Officer, Kayamkulam, with all the

relevant documents in his possession to support his claim for

the input tax credit of an amount of Rs.4,84,448/- for the

Assessment Year 2017-18. The State Tax Officer, Kayamkulam,

will, after examining the documents and hearing the

petitioner, pass fresh orders in accordance with the law within

a period of two weeks thereafter. If the petitioner is

dissatisfied with the order so passed on remand, he may take

recourse to the appropriate proceeding under the Statute. W.P.(C) No.31056 & 31026/2023

However, it is made clear that a writ petition shall not be

entertained.

W.P.(C) No.31026/2023

6. The present writ petition under Article 226 of the

Constitution of India has been filed by the petitioner

impugning the Exts.P4 and P5 order. The petitioner is a

registered dealer under the provisions of the CGST/SGST Act.

The petitioner had filed monthly returns GSTR 3B for the

Assessment Year 2017-18.

7. Notice under Section 73(1) of the SGST/CGST Act,

along with DRC 01, was issued to the petitioner. However, the

petitioner did not produce any documentary proof to support

his claim. In view thereof, considering the difference between

GSTR 2A and 3B, the input tax credit claim of the petitioner to

the extent of Rs.1,33,580/- under the SGST and the same

amount under the CGST was disallowed. The Assessing

Authority has levied interest of Rs.1,46,938/- under the SGST W.P.(C) No.31056 & 31026/2023

and the same amount under the CGST, and Rs.13,358/- each

penalty has been imposed under the SGST and CGST. The total

tax, interest and penalty has been assessed at Rs.5,87,752/-.

8. The learned Counsel for the petitioner submits that

the supplier-dealers have paid the tax for which the petitioner

had claimed input tax credit, and the petitioner has all the

evidence to support his claim. The petitioner should be

granted one opportunity before the Assessing Authority to

produce all the documents to support his claim regarding his

claim for the input tax credit to the extent of Rs.5,87,752/-.

9. Considering these aforesaid facts, the impugned

order to the extent of disallowing the input tax credit is set

aside. The petitioner is directed to appear before the State Tax

Officer, Perumbavoor, with all the relevant documents in his

possession to support his claim for the input tax credit for the

Assessment Year 2017-18. The State Tax Officer,

Perumbavoor, after examining the documents and hearing the W.P.(C) No.31056 & 31026/2023

petitioner, will pass fresh orders in accordance with the law

within a period of two weeks thereafter. If the petitioner is

dissatisfied with the order so passed on remand, he may take

recourse to the appropriate proceeding under the Statute.

However, it is made clear that a writ petition shall not be

entertained.

With the aforesaid directions, both the writ petitions are

disposed of.

Sd/-

DINESH KUMAR SINGH JUDGE

jjj W.P.(C) No.31056 & 31026/2023

APPENDIX OF WP(C) 31026/2023

PETITIONER EXHIBITS

Exhibit-P1 TRUE COPY OF THE SHOW CAUSE NOTICE IN FORM GST ASMT 10 NO.32AAEFC5987G1ZD/2017-18 DATED

23..6..2020 ISSUED BY THE 1ST RESPONDENT.

Exhibit-P2 TRUE COPY OF THE REPLY IN ASMT 11 WITH NO.ARN:ZD320920005456Q DATED 8..9..2020 ALONG WITH ATTACHED REPLY DATED 31..8..2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.

Exhibit-P3 TRUE COPY OF THE SHOW CAUSE NOTICE NO.32AAEFC5987G1ZD/2017-18 DATED 1..2..2022 ISSUED BY THE 1ST RESPONDENT.

Exhibit-P4 TRUE COPY OF THE ASSESSMENT ORDER NO.32AAEFC5987G1ZD/2017-18 DATED 4..11..2022 ALONG WITH ANNEXURES AND DRC 07 ISSUED BY THE 1ST RESPONDENT.

Exhibit-P5 TRUE COPY OF THE NOTICE NO.AR/B4/32AAEFC5987G1ZD/ 2017-18 DATED

18..9..2023 IN MALAYALAM WITH TRUE ENGLISH TRANSLATION ISSUED BY THE 2ND RESPONDENT. W.P.(C) No.31056 & 31026/2023

APPENDIX OF WP(C) 31056/2023

PETITIONER EXHIBITS

Exhibit-P1 TRUE COPY OF THE ASSESSMENT ORDER NO.32BIH PA0229H1ZY/2017-18 DATED 15..2..2022 ISSUED BY THE 1ST RESPONDENT.

Exhibit-P2 TRUE COPY OF THE ORDER U/S 73 AND DRC 07 BEARING NO.ZJ3202220071551 DATED 16..2..2022 ISSUED BY THE 1ST RESPONDENT.

Exhibit-P3 TRUE COPY OF THE RECOVERY NOTICE NO.32BIHPA0229H1ZY/2017-18 DATED 9..6..2023 IN MALAYALAM WITH TRUE ENGLISH TRANSLATION ISSUED BY THE 2ND RESPONDENT.

Exhibit-P4 TRUE COPY OF THE ORDER DATED 24..8..2023 IN W.P.(C) 28331/2023 OF THIS HON'BLE COURT.