GST Update

 Desk of CA. Praveen Sharma – 882 Series (CAPS) 

Calcutta High Court in the case of Bidyut Autotech Private Limited and another

The writ petition challenged the appellate order dated 06.02.2025, arising from a GST dispute where a vehicle dealer failed to report CESS liability in GSTR-3B, though CESS appeared in GSTR-2A from purchases.

The dealer claimed the lapse was revenue-neutral since unutilised input CESS fully covered the CESS payable on outward supplies. This was later corrected in GSTR-9, reflecting the true tax position.

A Section 74 SCN was issued for non-payment of CESS, leading to demand of tax, interest, and penalty. With no reply filed, an adverse order followed.

In appeal, the authority agreed there was no fraud or suppression and shifted the case from Section 74 to Section 73 but still upheld the tax demand without considering accumulated CESS ITC.

The dealer argued that GSTR-9 showed the correct figures and proved revenue neutrality. The State argued GSTR-9 was filed late, but the Court held the new restriction under Section 44(2) applied only from 01.10.2023, and the filing was before this date.

The Court relied on Article 265, stating tax cannot be collected without legal authority. Ignoring available ITC and enforcing demand would breach this principle.

The High Court set aside the appellate order and remanded the matter, directing reconsideration after evaluating GSTR-9, CESS ITC, and the revenue-neutral nature of the lapse.

LINK: CA. Praveen Sharma on Linkedin

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