Kerala High Court
Asha vs Union Of India on 24 January, 2025
Author: Bechu Kurian Thomas
Bench: Bechu Kurian Thomas
2025:KER:5932
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
FRIDAY, THE 24TH DAY OF JANUARY 2025 / 4TH MAGHA, 1946
WP(C) NO. 2878 OF 2025
PETITIONER:
ASHA
AGED 55 YEARS
PROPRIETOR ALINTETHEKKETHIL AGENCIES VII,
489,490,491, MANKUZHY MAVELIKARA,
ALAPPUZHA, PIN - 690558
BY ADVS.
R.JAIKRISHNA
NARAYANI HARIKRISHNAN
C.S.ARUN SHANKAR
ANISH P.
AKHIL SHAJI
RESPONDENTS:
1 UNION OF INDIA
THROUGH ITS SECRETARY (REVENUE),
MINISTRY OF FINANCE, DEPARTMENT OF REVENUE,
GOVERNMENT OF INDIA, NORTH BLOCK,
NEW DELHI G.P.O., PIN - 110001
2 STATE OF KERALA
REPRESENTED BY ITS CHIEF SECRETARY,
SECRETARIAT, THIRUVANANTHAPURAM G.P.O.,
THIRUVANANTHAPURAM, PIN - 695001
3 GOODS AND SERVICES TAX NETWORK
EAST WING 4TH FLOOR,
WORLD MARK - I AERO CITY, PIN - 110037
NEW DELHI REPRESENTED BY ITS CHAIRMAN
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W.P.(C). No.2878 of 2025
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4 COMMISSIONER
OFFICE OF THE COMMISSIONER STATE GOODS-
AND SERVICE TAX DEPARTMENT TAX TOWER,
KARAMANA P.O THIRUVANANTHAPURAM, PIN - 673006
5 STATE TAX OFFICER
OFFICE OF THE STATE TAX OFFICER TAX PAYER SERVICE
CIRCLE CHENGANNUR STATE GOPDS AND SERVICE TAX
DEPARTMENT MINI CIVIL STATION,
CHENGANNUR ALAPPUZHA, PIN - 689121
BY ADV. DR.THUSHARA JAMES,
SENIOR GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 24.01.2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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W.P.(C). No.2878 of 2025
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BECHU KURIAN THOMAS, J.
---------------------------------------
W.P.(C). No.2878 of 2025
---------------------------------------
Dated this 24th day of January, 2025
JUDGMENT
Petitioner challenges Exhibit-P17 order of assessment issued by
the fifth respondent, apart from a direction to set off the eligible Input
Tax Credit available under the head IGST against the output tax liability
of the petitioner under the heads of CGST and SGST for the assessment
year 2019-20.
2. Petitioner contends that during the period from April 2019
to March 2020, she had received various interstate supplies of goods as
well as interstate inward supplies and had obtained eligible Input Tax
Credit under IGST. Due to the transition stage of GST, by mistake, the
entire ITC of IGST was bifurcated under the heads of CGST and SGST
instead of claiming it entirely under IGST. Consequently, a notice for
assessment was issued under Section 73 of the Central Goods and
Services Tax Act, 2017 by the assessing officer and thereafter, by the
impugned order Exhibit-P17, the assessing officer found that the
petitioner had wrongly taken credit of Input Tax available under the
head IGST through the heads of CGST and SGST and imposed a huge
liability on her towards tax, interest and penalty.
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3. I have heard Sri. R. Jaikrishna, the learned counsel for the
petitioner, apart from Dr. Thushara James, the learned Senior
Government Pleader and Sri. P. R. Sreejith, the learned Standing
Counsel.
4. In a recent decision in Rejimon Padickapparambil Alex
v. Union of India and Others [2024 KHC Online 7215], a Division
Bench of this Court had observed that the electronic credit ledger is in
the nature of a wallet with different compartments of Integrated Goods
and Services Tax, Central Goods and Services Tax and State Goods and
Services Tax. It was also held that there cannot be any wrong availing of
Input Tax Credit merely because a taxpayer had availed the benefit of
credit of input tax available in one compartment under the other. It has
also been observed, after referring to Circular No. 192/04/2023-GST that
the Input Tax Credit available in the electronic credit ledger should be
considered as a pool of funds designated for different types of taxes,
such as CGST, IGST and SGST. Relying upon the circular, it is also
observed that, for utilising the IGST liability, the eligibility of the fund for
payment is based on the total balance in the entire wallet and not just
the IGST compartment. It is thereafter held that the GST system treats
the electronic credit ledger as a unified resource, and interest is incurred
if collectively the available funds fall below the amount of wrongly
availed credit during the specified period.
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5. Relying upon the aforesaid decision of the Division Bench, it
is contended that the impugned order of assessment is contrary to the
principle laid down therein. On a perusal of the impugned order, it is
noticed that the learned counsel for the petitioner is justified in the
above submission since there is no consideration of the aforesaid
principle in the impugned order. Hence, it is necessary that the
assessment order be set aside and a reconsideration be directed.
6. Accordingly, I set aside Exhibit-P17 impugned order and
direct the fifth respondent to reconsider the matter in the light of the
decision in Rejimon Padickapparambil Alex (supra), as expeditiously
as possible, at any rate, within a period of three months from the date of
receipt of a copy of this judgment. Needless to mention that the
recovery proceedings, if any initiated pursuant to Exhibit-P17, cannot
survive.
The writ petition is allowed as above.
Sd/-
BECHU KURIAN THOMAS
JUDGE
Jka/24.01.25.
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APPENDIX OF WP(C) 2878/2025
PETITIONER'S EXHIBITS
Exhibit P1 A TRUE COPY OF THE STATEMENT OF
COMPARISON OF GSTR 2A WITH GSTR3B FOR THE
YEAR 2019-2020.
Exhibit P2 A TRUE COPY OF THE SUMMARY OF GSTR 2A FOR
THE YEAR 2019-2020.
Exhibit P3 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR APRIL 2019 FILED BY THE
PETITIONER DATED 28.05.2019.
Exhibit P4 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR MAY 2019 FILED BY THE
PETITIONER DATED 21.06.2019.
Exhibit P5 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR JUNE 2019 FILED BY THE
PETITIONER DATED 17.07.2019.
Exhibit P6 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR JULY 2019 FILED BY THE
PETITIONER DATED 13.08.2019.
Exhibit P7 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR AUGUST 2019 FILED BY THE
PETITIONER DATED 21.09.2019.
Exhibit P8 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR SEPTEMBER 2019 FILED BY THE
PETITIONER DATED 24.10.2019.
Exhibit P9 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR OCTOBER 2019 FILED BY THE
PETITIONER DATED 25.11.2019.
Exhibit P10 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR NOVEMBER 2019 FILED BY THE
PETITIONER DATED 26.12.2019.
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Exhibit P11 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR DECEMBER 2019 FILED BY THE
PETITIONER DATED 27.01.2020.
Exhibit P12 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR JANUARY 2020 FILED BY THE
PETITIONER DATED 21.02.2020.
Exhibit P13 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR FEBRUARY 2020 FILED BY THE
PETITIONER DATED 24.03.2020.
Exhibit P14 A TRUE COPY OF FORM GSTR 3B - MONTHLY
RETURNS FOR MARCH 2020 FILED BY THE
PETITIONER DATED 15.05.2020.
Exhibit P15 A TRUE COPY OF THE FORM GST DRC 03 DATED
03.05.2024.
Exhibit P16 A TRUE COPY OF THE SHOW CAUSE NOTICE
ISSUED BY THE 5TH RESPONDENT TO THE
PETITIONER DATED 29.05.2024.
Exhibit P17 A TRUE COPY OF THE ASSESSMENT ORDER
ISSUED BY THE 5TH RESPONDENT DATED
16.08.2024.
Exhibit P18 A TRUE COPY OF THE REPRESENTATION
SUBMITTED BY THE PETITIONER BEFORE THE
DEPUTY COMMISSIONER, TAX PAYER SERVICE
CIRCLE, CHENGANNUR DATED 12.11.2024.
Exhibit P19 A TRUE COPY OF THE JUDGEMENT OF THIS
HON'BLE COURT IN WP(C) 35868 OF 2018
DATED 12.11.2018.
Exhibit P20 A TRUE COPY OF THE JUDGMENT OF THIS
HON'BLE COURT IN WA 54/2024 DATED
26.11.2024.
