Madras High Court
Tvl.Kavin Hp Gas Gramin Vitrak vs The Commissioner Of Commercial Taxes on 24 November, 2023
Author: S.Srimathy
Bench: S.Srimathy
W.P.(MD).Nos.7173 and 7174 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 29.09.2023
PRONOUNCED ON :24.11.2023
CORAM
THE HONOURABLE MRS.JUSTICE S.SRIMATHY
W.P.(MD).Nos.7173 and 7174 of 2023
and
W.M.P.(MD)Nos.6764 and 6765 of 2023
Tvl.Kavin HP Gas Gramin Vitrak,
represented by Proprietor Palaniyandi Arun,
No.112, 113, N.A., Cheran Complex,
Bank Road, Uranganpatty,
Madurai – 625 109. ... Petitioner in both cases
Vs.
1.The Commissioner of Commercial Taxes,
Office of the Principal and Special
Commissioner of Commercial Taxes,
Ezhilagam, Chepauk,
Chennai-600 005.
2.The Deputy State Tax Officer-1,
Office of State Tax Officer,
Melur Assessment Circle,
CT Building, Dr.Thangaraj Salai,
Madurai-20. ... Respondents in both cases
Prayer in W.P.(MD)No.7173 of 2023: Writ Petition filed under Article 226 of
the Constitution of India, praying this Court to issue a Writ of Certiorari, to
call for records pertaining to the impugned proceedings of the 2nd respondent in
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W.P.(MD).Nos.7173 and 7174 of 2023
GSTIN.33BAGPA0449A1ZM/2017-18, dated 16.08.2022 and to quash the
same as illegal and devoid of merits.
Prayer in W.P.(MD)No.7174 of 2023: Writ Petition filed under Article 226 of
the Constitution of India, praying this Court to issue a Writ of Certiorari, to
call for records pertaining to the impugned proceedings of the 2nd respondent in
GSTIN.33BAGPA0449A1ZM/2018-19, dated 16.08.2022 and to quash the
same as illegal and devoid of merits.
In both cases:
For Petitioner : Mr.Raja Karthikeyan
For Respondents : Mr.A.K.Manikkam
Special Government Pleader
COMMON ORDER
These writ petitions are filed for writ of Certiorari to quash the impugned
orders, dated 16.08.2022. The writ petition in W.P.(MD)No.7173 of 2023 is
filed for the financial year 2017-2018 and W.P.(MD)No.7174 of 2023 is filed
for the financial year 2018-2019.
2. The petitioner is doing business related to Petroleum Gases and other
Gaseous Hydrocarbons in Urangampatty and registered with the respondent
department in GSTIN.33BAGPA0449A1ZM and was promptly filing monthly
returns. Based on the scrutiny and verification of GSTR-3B returns filed in the
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W.P.(MD).Nos.7173 and 7174 of 2023
financial year 2017-2018 and 2018-2019, the 2nd respondent issued notice dated
27.04.2022 and directed the petitioner to show cause why there was a belated
claim of Input Tax Credit (ITC) and also directed to remit back the same as
wrong claim of ITC and proposed to reverse the same. Further it is alleged that
the petitioner had claimed on the purchase of Petroleum product. The petitioner
submitted that due to financial crisis the petitioner had submitted GSTR-3B
physically and the same was already explained to the respondents in person
through his Accountant and hence the allegation by the respondents that the
said claim is false cannot be accepted.
3. The contention of the petitioner is that he had also explained the fact
that the claim of ITC is described under Rule 60 of the TNGST Rules and the
Form prescribed is Form GSTR-2, but the same was not notified. Moreover,
the filing of GSTR-3B is to avail the input tax credit and not for claiming the
same. So the reversal of input tax for belated claim as per Section 16(4) of
TNGST Act is not applicable, since the filing of GSTR3B is not meant for
claim of input tax credit. The further contention of the petitioner is that the
sales made to the petitioner and the tax collected from the petitioner were duly
reported by other end supplier through their respective GSTR-1 and the
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W.P.(MD).Nos.7173 and 7174 of 2023
petitioner could not claim the same since Form GSTR-2 is not notified. Hence,
the petitioner has accounted the purchases and credited the tax payment made
through tax invoice, claimed ITC in the books of accounts and availed the same
through GSTR-3B filed physically. Hence, the allegation of belated claim of
ITC itself is false and misleading.
4. However, to the shock of the petitioner, the 2nd respondent has passed
the impugned order and confirmed the proposal with regard to the alleged
belated claim of input tax credit. The 2nd respondent has not at all dealt with
the specific contention that the claim of the ITC can be made only through
GSTR-2 and the said Form was not notified and the filing of GSTR-3B is not
meant for claiming of ITC. The petitioner's specific contention of the petitioner
is that the petitioner had claimed ITC without violation of procedures
contemplated under the Act and rules. When the petitioner is entitled to ITC as
per the provisions, disallowing the same by observing that the returns are not
filed in prescribed time and the same is totally irrelevant. Moreover, the
respondents had passed a non-speaking order, without meeting out the specific
contentions of the petitioner. Moreover, GSTR-3B is not at all returned as
prescribed in Section 39 of the TNGST Act. As per Notification No.49 of 2019
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W.P.(MD).Nos.7173 and 7174 of 2023
(Central Tax), dated 09.10.2019, the Government declared that the
reconciliation statement GSTR-3B may be treated as GSTR-3 in retrospective
manner and the same is not correct and the same is against the Constitution.
Hence, the petitioner has approached this Court to quash the impugned order.
5. The 2nd respondent had filed counter affidavit in both the writ petitions
stating that the writ petitions are not maintainable since the petitioner has an
alternative remedy to prefer an appeal before the jurisdictional Appellate
Deputy Commissioner (GST Appeals). Prima facie the revision of assessment
was made out based on the scrutiny of GSTR-3B returns and hence notices in
Form- GST-DRC-01A (Rule 142(i)) were issued to explain the issue with the
documentary evidences why there was a belated claim of ITC. The statute is
very clear that the burden of proof is lying with the taxable person and he has to
prove that there is no evasion of tax. Based on the belated filing of returns
GSTR-3B, a notice, dated 03.03.2022, was issued proposing to levy tax under
Section 73(5) of the Act, 2017. The petitioner has not filed any objections with
the supportive documents till the show cause notice in Form-GST-DRC-01
(Rule 142(I)), dated 27.04.2022, was issued. In the absence of objections, the
said show cause notice in Form-GST-DRC-01 Rule 142(1) dated 27.04.2022
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W.P.(MD).Nos.7173 and 7174 of 2023
was issued proposing to levy tax and penalty, calling for objections to the
proposal, but the petitioner had not submitted any objections. Thereafter,
personal hearing was granted on 07.07.2022 in order to grant natural justice.
But the petitioner has not attended the personal hearing with supportive
documents till the passing of order in Form-GST DRC-07 (Rule 142 (5)).
When the petitioner has not filed any objections, it would be evident that the
petitioner is not having any record or documents to prove his case. As per the
provisions of Act and Rules especially Rule 61(5) 2017, every taxable person
has to file monthly return for every month on or before 20 th of the subsiding
month. The taxable person is mandated to file monthly returns only
electronically and not by manually. Since the petitioner had not filed any
objections and had not attending the personal hearing, the respondents left with
no other option than to confirm the proposal already made in the notice.
Accordingly, order, dated 16.08.2022, was passed. Therefore, the 2nd respondent
prayed to dismiss the writ petitions.
6. Heard Mr.Raja Karthikeyan, learned Counsel appearing for the
petitioner in both the writ petitions and Mr.A.K.Manikkam, learned Special
Government Pleader appearing for the respondents in both the writ petitions
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W.P.(MD).Nos.7173 and 7174 of 2023
and perused the records.
7. The contention of the petitioner is that as per Section 38 of the GST
Act read with Rule 60 of the TNGST Rules, the ITC shall be claimed through
GSTR-2, GSTN had not provided the facility of GSTR-2 till now. The Learned
Counsel appearing the petitioner specifically submitted that it is due to
technical reasons and the mistake ought to be rectified by the GST Council,
unfortunately the GST Council had not taken up the issue to rectify the same.
Since the GSTR-2 was not notified, which is meant for claiming ITC, hence the
petitioner could not claim the ITC within the prescribed time. In the counter
affidavit, the respondents have not denied the allegation. Further the 2nd
respondent has only stated that any Form can be filed only electronically, that
too it has to be filed on or before 20th of every month. When the said GSTR-2
Form is not available, then electronical filing is not possible, then taxable
person cannot be expected to file the Form electronically. Therefore, the basis
of initiation of the proceedings itself is not sustainable.
8. The petitioner further submits the claim of ITC defined under Rule 60,
which reads as under:
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W.P.(MD).Nos.7173 and 7174 of 2023
“Rule 60:- Form and manner of furnishing details of inward supplies:
1….
2….
3. The registered person shall specify the inward supplies in respect of
which he is not eligible, either fully or partially for input tax credit in
Form GSTR-2 where such eligibility can be determined at the invoice
level”
When the Rules specifically prescribes GSTR-2 to specify the inward supplies
for claiming ITC, when the said form is not notified, the petitioner cannot be
expected to file the same to claim ITC.
9. The respondents without giving any opportunity to file the returns by
notifying the Form GSTR-2, cannot expect the taxable person to file returns. In
fact, the petitioner has no intension to violate the provisions of the Act. In
order to show his bonafide, he has filed physically. Moreover, all tax liability is
paid and there is no loss to the department. Moreover, the petitioner has also
claimed financial crisis. Even though the financial crisis cannot be a ground for
not filing the returns in time, not notifying of Form GSTR-2 is clearly a ground
to consider the petitioner's claim of belated returns.
10. The learned Counsel appearing for the petitioner relied on the
judgment rendered by the High Court of Punjab and Haryana in the case of
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W.P.(MD).Nos.7173 and 7174 of 2023
Hans Raj Sons Vs. Union of India and others in CWP No.36396 of 2019,
dated 16.12.2019, wherein the Hon’ble Court has allowed the tax payer to file
the return either electronically or manually, if the portal is not opening. In the
said judgment, the High Court of Punjab and Haryana has relied on another
judgment rendered in CWP No.30949 of 2018, in the case of Adfert
Technologies Private Limited Vs. Union of India and others, dated
04.11.2019. The same issue was also considered by the Madras High Court in
W.P.No.29676 of 2019, dated 06.10.2020, wherein it is stated as under:
“19. Admittedly, the 31st of March 2019 was the last date by
which rectification of Form – GSTR 1 may be sought. However, and also
admittedly, the Forms, by filing of which the petitioner might have
noticed the error and W.P. No.29676 of 2019 sought amendment, viz.
GSTR-2A and GSTR-1A are yet to be notified. Had the requisite Forms
been notified, the mismatch between the details of credit in the
petitioner’s and the supplier’s returns might well have been noticed and
appropriate and timely action taken. The error was noticed only later
when the petitioners’ customers brought the same to the attention of the
petitioner.
20. In the absence of an enabling mechanism, I am of the view
that assessee should not be prejudiced from availing credit that they are
otherwise legitimately entitled to. The error committed by the petitioner
is an inadvertent human error and the petitioner should be in a position
to rectify the same, particularly in the absence of an effective, enabling
mechanism under statute.
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W.P.(MD).Nos.7173 and 7174 of 2023
21. This writ petition is allowed and the impugned order set
aside. The petitioner is permitted to re-submit the annexures to Form
GSTR-3B with the correct distribution of credit between IGST, SGST
and CGST within a period of four weeks from date of uploading of this
order and the respondents shall take the same on file and enable the
auto-population of the correct details in the GST portal. No costs.”
In the above said order, this Court has clearly held that in the absence of any
enabling mechanism, the assessee cannot be prejudiced by not granting ITC.
Therefore, following the aforesaid judgments this Court is inclined to set aside
the impugned order.
11. The next contention of the petitioner is that the ITC can be claimed
through GSTR-3B, but GSTN has not permitted to file GSTR-3B in online if
the dealers had not paid taxes on the outward supply / sales. In other words, if
the dealer is not enabled to pay output tax, he is not permitted to file GSTR-3B
return in online and it is indirectly obstructing the dealer to claim ITC. In the
present case the petitioner was unable to pay output taxes and so the GSTN not
permitted to file GSTR-3B in the departmental web portal it is constructed that
the petitioner had not filed GSTR-3B online, that resulted the dealer unable to
claim his ITC in that particular year in which he paid taxes in his purchases.
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W.P.(MD).Nos.7173 and 7174 of 2023
Hence if the GSTN provided option for filing GSTN without payment of tax or
incomplete GSTR-3B, the dealer would be eligible for claiming of input tax
credit. The same was not provided in GSTN network hence, the dealers are
restricted to claim ITC on the ground of non-filing of GSTR-3B within
prescribed time. if the option of filing incomplete filing of GSTR-3B are
provided in the GSTN network the dealers would avail the claim and determine
self-assessed ITC in online. The petitioner had expressed real practical
difficulty. The GST Council may be the appropriate authority but the
respondents ought to take steps to rectify the same. Until then the respondents
ought to allow the dealers to file returns manually.
12. Therefore, following the above said judgments, this Court is inclined
to quash the impugned orders and accordingly the impugned orders are
quashed. The respondents shall permit the petitioner to file manual returns
whenever the petitioner is claiming ITC on the outward supply / sales without
paying taxes. Further the respondents are directed accept the belated returns
and if the returns are otherwise in order and accordance to law, the claim of ITC
may be allowed. Hence, the matter is remitted back to the authorities for
reconsideration.
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W.P.(MD).Nos.7173 and 7174 of 2023
13. With the above said observation, the writ petitions are allowed. No
costs. Consequently, connected miscellaneous petitions are closed.
24.11.2023
NCC : Yes/No
Index : Yes / No
Internet : Yes/ No
Tmg
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W.P.(MD).Nos.7173 and 7174 of 2023
To
1.The Commissioner of Commercial Taxes,
Office of the Principal and Special
Commissioner of Commercial Taxes,
Ezhilagam, Chepauk,
Chennai-600 005.
2.The Deputy State Tax Officer-1,
Office of State Tax Officer,
Melur Assessment Circle,
CT Building, Dr.Thangaraj Salai,
Madurai-20.
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W.P.(MD).Nos.7173 and 7174 of 2023
S.SRIMATHY, J.
Tmg
W.P.(MD).Nos.7173 and 7174 of 2023
24.11.2023
https://www.mhc.tn.gov.in/judis
