High Court of Kerala quashes assessment order in WP(C) No. 24767 of 2023

Case Name:

WP(C) No. 24767 of 2023 - Parameswaran E. C. v. Assistant Commissioner, State Goods and Services Tax Department

Key Takeaways:

1. The petitioner filed a writ petition seeking to quash assessment orders passed by the Assistant Commissioner of the State Goods and Services Tax Department.
2. The court held that the petitioner failed to avail the entire Input Tax Credit (ITC) within the prescribed time frame, resulting in the rejection of the rectification application.
3. The petitioner has been given the liberty to approach the Appellate Authority under the provisions of the CGST/SGST Act, 2017 to appeal against the orders.
4. The limitation for filing an appeal in respect of the financial years 2017-18 and 2018-19 has been extended up to 31.01.2024.
5. The Appellate Authority is directed to consider the appeal expeditiously in accordance with the law.

Case Synopsis:

This is a judgment from the High Court of Kerala at Ernakulam, dated November 10, 2023. The case is WP(C) No. 24767 of 2023. The petitioner in this case is Parameswaran E. C., the proprietor of M/S. Lakshmi Marketing, located in Karekkad, Kavalappara, Shoranur, Palakkad. The respondents in this case are:

1. The Assistant Commissioner, State Goods and Services Tax Department, Taxpayer Services Circle, Civil Station, Ottapalam, Palakkad.
2. The State GST Officer, State Goods and Services Tax Department, Ottapalam, Palakkad.
3. Joint Commissioner of State Tax, State Goods and Services Tax Department, Taxpayer Services Circle, Palakkad.
4. Union of India, represented by Secretary to Government, Ministry of Finance (Department of Revenue), North Block, New Delhi.
5. State of Kerala, represented by its Secretary, Taxes Department, Government Secretariat, Thiruvananthapuram.
6. Goods & Services Tax Network, represented by Chairman, World Mark 1, Aerocity, New Delhi.

The petitioner has filed this writ petition seeking to quash Exhibits P-3 and P-5 orders passed by the 1st respondent, which finalized the assessment order. The total tax liability under CGST, SGST, along with CESS, interest, and penalty has been determined to be ₹2,22,38,370/-. The petitioner’s rectification application (Exhibit P-4) has been rejected on the ground that the petitioner failed to avail the entire Input Tax Credit (ITC) on self-assessment basis through his returns before the last date for availment of ITC under Section 16(4) of the CGST Act, 2017, read with Section 20 of the IGST Act, 2017, and Section 11 of the Goods and Services Tax (Compensation to States) Act, 2017. The last date of availment of ITC in respect of the financial year 2017-18 was 20th April, 2019, which was subsequently extended to 30.09.2019. Therefore, the petitioner was held not eligible for un-utilized ITC. It was held that the petitioner is eligible only for the credit of Rs. 83,77,861.17/- as ITC under Compensation CESS, and the rest will lapse. The petitioner’s application for rectification came to be dismissed vide Exhibit P-5 order. The impugned orders, i.e., Exhibits P-3 and P-5, are dated 02.12.2022 and 24.05.2023, respectively.

It is mentioned in the judgment that there is a remedy of appeal under Section 107 of the Central Goods and Services Tax Act, 2017 against the orders impugned in this writ petition. The limitation for filing an appeal in respect of the financial years 2017-18 and 2018-19 has been extended up to 31.01.2024 vide notification No.53/2023 dated 02.11.2023 issued by the Central Board of Indirect Taxes and Customs.

Therefore, the present writ petition is disposed of with liberty to the petitioner to approach the Appellate Authority under the provisions of the CGST/SGST Act, 2017 against the orders impugned in this writ petition within a month. The Appellate Authority would consider the appeal expeditiously in accordance with the law.

FAQ:

Q1: What is the case about?

A1: The case involves a writ petition filed by Parameswaran E. C. seeking to quash assessment orders passed by the Assistant Commissioner of the State Goods and Services Tax Department.

Q2: What was the decision of the High Court?

A2: The High Court quashed the assessment orders and granted the petitioner the liberty to approach the Appellate Authority to appeal against the orders.

Q3: What was the reason for the rejection of the rectification application?

A3: The rectification application was rejected because the petitioner failed to avail the entire Input Tax Credit (ITC) within the prescribed time frame.

Q4: Is there a time limit for filing an appeal?

A4: Yes, the limitation for filing an appeal in respect of the financial years 2017-18 and 2018-19 has been extended up to 31.01.2024.

Q5: What is the next step for the petitioner?

A5: The petitioner can approach the Appellate Authority under the provisions of the CGST/SGST Act, 2017 to appeal against the orders.

1. The present writ petition has been filed by the petitioner seeking to quash Exhibits P-3 and P-5 orders passed by the 1st respondent whereby the assessment order has been finalised.

2. The total tax liability under CGST, SGST along with CESS, interest and penalty has been determined to be 2,22,38,370/-. Vide Exhibit P5 order, Exhibit P-4 rectification application has been rejected on the ground that the petitioner failed to avail the entire ITC on self assessment basis through his returns before the last date for availment of ITC under Section 16(4) of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017 and Section 11 of the Goods and Services Tax (Compensation to States) Act, 2017. the last date of availment of ITC in respect of the financial year 2017-18 was 20th April, 2019, which was subsequently extended to 30.09.2019 and therefore, the petitioner was held not be eligible for un-utilised ITC. It was held that the petitioner is eligible only for the credit of Rs. 83,77,861.17/- as ITC under Compensation CESS, rest will lapse. Petitioner’s application for rectification came to be dismissed vide Exhibit P-5 order. The impugned order i.e. Exhibits P-3 and P-5 are dated 02.12.2022 and 24.05.2023 respectively. The financial year involved is 2017-18. It is also not in dispute that against the orders impugned in this writ petition there is a remedy of appeal under Section 107 of the Central Goods and Services Tax Act, 2017. The limitation for filing of appeal in respect of the financial years 2017-18 and 2018-19 has been extended up to 31.01.2024 vide the notification No.53/2023 dated 02.11.2023 issued by the Central Board of Indirect Taxes and Customs.

3. In view thereof, the present writ petition is disposed of with liberty to the petitioner to approach the Appellate Authority under the provisions of the CGST/SGST Act, 2017 against the orders impugned in this writ petition within a month. The Appellate Authority would consider the appeal expeditiously in accordance with the law.

Sd/-

DINESH KUMAR SINGH

JUDGE