M/S Munna Traders vs The State Of Bihar
2023 Latest Caselaw 3535 Patna

         IN THE HIGH COURT OF JUDICATURE AT PATNA
                    Civil Writ Jurisdiction Case No.9032 of 2023
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M/s Munna Traders, having its place of business at Golapar, Barbigha, Town and District Sheikhpura, through its Proprietor Manoj Kumar, aged about 50th years, Male, son of Late Raghu Sao, Resident of At P.O. and P.S. Barbigha, Town and District Sheikhpura.

... ... Petitioner/s Versus

1. The State of Bihar through the Commissioner, Department of State Taxes, Government of Bihar, Patna.

2. The Additional Commissioner of State Taxes (Appeal), Bhagalpur Division, Bhagalpur.

3. The Assistant Commissioner of State Taxes, Lakhisarai Circle, Lakhisarai.

... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s : Mr. Manoj Kumar Keshri, Advocate For the Respondent/s : Mr. Vivek Prasad (GP7) ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

Date : 08-08-2023

The petitioner, an assessee, under the Bihar Goods

and Services Tax Act, 2017 (for brevity, 'BGST Act') is

aggrieved with the interest and penalty imposed on the assessee

for excess claim of input tax credit, which stood paid

subsequent to a notice issued under the BGST Act. The order

imposing penalty is produced as Annexure-4 and an appeal

filed, with delay, stood rejected on account of the delay being in

excess of that which is permitted condonation under Section

107(4) of the BGST Act.

Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

2. Learned counsel for the petitioner at the outset

submits that there is a further remedy available before the

Tribunal, which has not been constituted under Section 109 of

the BGST Act. It is also pointed out that in many cases, this

Court grants a stay of recovery on payment of 20% of the

balance tax due, till the Tribunal is constituted and an appeal is

enabled. Further, it is pointed out that there was no excess claim

of ITC and the petitioner has the invoices, which could be

produced and the Assessing Officer is enjoined upon to consider

the same as per the Circular bearing F. No.CBIC-20001/2/2022-

GST, Government of India, Ministry of Finance, Department of

Revenue, Central Board of Indirect Taxes and Customs, GST

Policy Wing, New Delhi, dated 27.12.2022. The payment made

of the excess claim was only under coercion of the respondent.

Reliance is also placed on the decision of the Hon'ble Supreme

Court in Price Waterhouse Coopers Pvt. Ltd. v. Commissioner

of Income Tax, Kolkata-I, (2012) 11 SCC 316 to urge that no

penalty would be leviable in the facts and circumstances of the

case.

3. The learned Government Advocate contended that

it was only in the scrutiny of the return, for the tax period July,

2017 to March, 2018, that the discrepancies were noticed, on Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

account of which notice was issued as per Annexure-A. The

petitioner paid the differential amount of tax, but did not pay the

interest due, despite a notice issued under Section 73(1) of the

BGST Act. It was hence the Assessing Officer passed the order

imposing interest and penalty to the tune of Rs.3,51,532/-. It is

also pointed out that there was eleven months delay in filing the

appeal before the first appellate authority and there could not

have been a condonation of delay. The first appeal having been

dismissed on the ground of delay, there is no scope for further

appeal to the Tribunal, when even this Court would not be

entitled to condone the delay beyond the period specifically

provided under the enactment. The petitioner despite a notice

for remitting the interest due, having not remitted it, was liable

to penalty, which cannot be absolved as per the statutory

provisions.

4. The petitioner had filed the returns for the

assessment year 2017-18 and on scrutiny under Section 61 of

the BGST Act, three discrepancies were noticed. ITC claim

under GSTR-1 was found to be in excess of that under GSTR-

2A/2B to the extent of Rs.4,62,542/-. The turn-over, as indicated

in GSTR-9C and RT-1 GTO, also were at variance. The

Assessing Authority also pointed out that the tax has been paid Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

mainly by I.T.C.

5. A reply was filed by the petitioner in which it is

stated that there was a discrepancy in the input tax credit claim

only because the invoices issued by the supplier had not been

uploaded on the GST portal. As far as the difference in turn

over, it was stated to be as per the financial statement under the

Bihar Value Added Tax Act, the predecessor enactment. Insofar

as the taxes being paid by the I.T.C, it was asserted that the

input tax credit ensured that there is no further tax liability on

the assessee/petitioner.

6. Admittedly, the assessee paid the difference of

input credit tax amount coming to Rs.4,71,290/- as on

08.12.2021 evidenced by Annexure-3. The assessee has made a

laconic statement in the memorandum that it was under the

coercion of the respondent assessing authority that the amount

of differential tax was paid up. We are not prepared to reckon

such coercion having been employed, especially when the

contention is raised after two years in a writ petition filed. Even

the appeal was delayed by eleven months.

7. As far as the delay occurred in filing the appeal, the

Hon'ble Supreme Court in Suo Motu Writ Petition (C) No. 3

of 2020, In Re: Cognizance For Extension of Limitation due to Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

the pandemic situation saved limitation between 15.03.2020 till

28.02.2022. It was also directed that an appeal could be filed

within ninety days from 01.03.2022. Hence, an appeal could

have been filed on or before 29.05.2022, which provision was

not availed by the petitioner herein. The Hon'ble Supreme Court

also declared that if a longer period than 90 days is provided in

a Statute, then that longer period will apply. In the BGST Act,

u/s 107(4) there is a provision for condonation of delay, if the

appeal is filed delayed, within one month of expiry of limitation.

Even if that be deemed to be applicable then the appeal ought to

have been filed by 28.06.2022.

8. The appeal is filed only on 31.01.2023 after seven

months from the date on which even the limitation period as

stipulated by the Hon'ble Supreme Court, expired.

9. In so far as the second appeal, as rightly pointed out

by the Government Advocate, no appeal is maintainable from

the order passed in the first appeal since it was dismissed on the

ground of delay. Section 107 of the BGST Act having provided

a specific time within which a delayed appeal can be entertained

by the first appellate authority on sufficient cause for the delay

being shown; there is no scope for a further appeal from an

order rejecting first appeal filed belatedly, beyond the time Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

provided. The Tribunal or even this Court would not have the

jurisdiction to direct such consideration. Hence, there is no

scope for following the orders, similar to the one passed at

Annexure-7 (CWJC No.1920 of 2023 titled as Angel Engicon

Private Limited v. The State of Bihar disposed of on

16.02.2023).

10. Now, we come to the interest and penalty levied

on the petitioner and the applicability of the decision in the case

of Price Waterhouse Coopers Pvt. Ltd.(supra).

11. In the cited decision, the Hon'ble Supreme Court

at the outset observed that the imposition of penalty in that case

was not justified on the facts of the case. Therein, a provision

for payment of gratuity was claimed as deduction, in the

statement filed along with the return; which also contained a

further statement that the same is not allowable. The Assessing

Officer saddled the assessee with penalty at 300% of the tax

sought to be evaded by furnishing inaccurate particulars. The

Hon'ble Supreme Court directed the assessee to file an affidavit

and based on the explanation offered found the mistake

committed to be "silly mistake" which also stood acknowledged

by the Tribunal as well as by the High Court. On the particular

facts, the Hon'ble Supreme Court set aside the penalty imposed Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

on the assessee under the Income Tax Act.

12. In the present case, it is seen that the assessee has

defaulted tax payment, based on an excessive claim of input tax

credit, later deposited the input tax credit without interest due

under Section 50; which attracted the penalty under Section 122.

We have already found that there can be no coercion found insofar

as the deposit is concerned. The assessee, hence, has admitted the

discrepancy with respect to excess claim of input tax credit and

paid the amounts due on which interest was also due under Section

50 of the BGST Act. The non-payment of tax due and the failure to

pay interest attracted the penalty imposed.

13. The reliance on the Circular, in the facts of the

present case is also not sustainable. The Circular was issued only

to get over the difficulties in the nascent stage of the goods and

services tax regime. There was a specific method provided by

which input tax credit claims could have been sustained even if

some discrepancies in the various returns filed were noticed. A

procedure was stipulated under paragraph 4 by which the

discrepancies could be rectified and the claim permitted by the

Assessing Officer. The said procedure does not apply to the

petitioner-assessee since he has admitted the allegation of excess

claim and remitted the amounts due by way of tax. The petitioner -

assessee has also not approached the Assessing Officer with the Patna High Court CWJC No.9032 of 2023 dt.08-08-2023

necessary evidence to substantiate the input tax credit; as provided

in the Circular. We also have to notice paragraph-6 of the Circular

which specifically indicates that the instructions in that Circular

will only apply to the ongoing proceedings in

scrutiny/audit/investigation, etc. for the financial years 2017-18

and 2018-19 and not to the completed proceedings. The

instructions would also apply in the respective years with respect

to any adjudication or appeal proceedings, pending. In the present

case, there is no proceeding of scrutiny or appeal pending and

there cannot be any revision of the input tax credit since the

allegation of excess claim has been admitted and differential

amount paid by the assessee. The penalty levied was proper and a

civil liability, attracted on the failure to pay the tax due, on a

wrong claim of input tax credit.

14. We find absolutely no reason to entertain the writ

petition and dismiss the same.

(K. Vinod Chandran, CJ)

(Partha Sarthy, J) Sunil/-

AFR/NAFR                AFR
CAV DATE
Uploading Date          11.08.2023
Transmission Date