GST Update

Desk of CA Praveen Sharma – 925 Series (CAPS)

Calcutta High Court in the case of Amar Iron Udyog Pvt. Ltd.

The Calcutta High Court recently examined a writ petition filed by Amar Iron Udyog Pvt. Ltd. challenging an appellate order dated 21 April 2025 passed under Section 107 of the GST Act. The appellate authority had dismissed the appeal filed against an adjudication order issued under Section 73 of the CGST Act.

The dispute originated from allegations of short payment of output tax, wrongful availment of input tax credit on import of goods, and reversal of ITC on account of suppliers’ non-filing of GST returns. The adjudicating authority confirmed the demand, including alleged excess ITC on imports, mainly on the ground that the assessee could not produce certified proof of IGST payment before Customs authorities.

The appellate authority upheld the adjudication order in full. The order was passed ex parte, as the assessee did not appear during the appellate proceedings.

Before the High Court, the assessee restricted its challenge to two specific issues. The first related to excess ITC on imported goods, and the second concerned ITC reversal due to non-filing of returns by suppliers.

During the course of hearing, the High Court called for reports from the Customs department. Customs authorities clarified that IGST had in fact been paid on the imported goods. However, since the Bills of Entry were manually processed, the IGST payment details were not electronically reflected on the GST portal due to system limitations.

Customs further confirmed that, after verification, all eight manual Bills of Entry were updated and the corresponding IGST details were now duly reflected on the GST portal.

In view of these developments, the High Court set aside the appellate findings relating to excess ITC on imports and remanded the matter to the appellate authority for fresh consideration.

On the issue of ITC reversal due to suppliers’ non-filing of returns, the Court permitted reconsideration by the appellate authority subject to payment of costs of ?15,000. The Court also clarified that it had not expressed any opinion on the merits of that issue.

The decision highlights the importance of verification of customs records, especially in cases involving manual Bills of Entry, and reiterates that appellate authorities must consider subsequent factual developments before confirming GST demands.


LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS