Court :
Punjab and Haryana High Court
Brief :
The Punjab and Haryana High Court in the case of M/s.Deepak Sales Corporation v. Union of India [CWP No. 283 of 2023 dated September 21, 2023] allowed the appeal filed by the Assessee by way of the writ petition and held that, the demand of interest and penalty is not tenable when the credit erroneously availed is reversed and such credit is not utilized by the Assessee.
Citation :
CWP No. 283 of 2023 dated September 21, 2023
The Punjab and Haryana High Court in the case of M/s.Deepak Sales Corporation v. Union of India [CWP No. 283 of 2023 dated September 21, 2023] allowed the appeal filed by the Assessee by way of the writ petition and held that, the demand of interest and penalty is not tenable when the credit erroneously availed is reversed and such credit is not utilized by the Assessee.
M/s. Deepak Sales Corporation ("the Petitioner") is a proprietorship trading concern and was previously registered under the Haryana VAT Act, 2003. The Petitioner got itself registered under the CGST Act after the introduction of GST. The Petitioner while filing returns and making the entry in the electronic credit ledger ("ECL"), for the month of August 2017, the Petitioner typed the amount of ITC as Rs.14,05,78,663/- instead of Rs.1,40,57,836/- thereby the Petitioner claimed the excess amount of ITC to the tune of Rs.12,65,20,827/-. Later, the Petitioner came to know about the error made in entering the amount. Thereafter, the Petitioner requested the Revenue Department ("the Respondent") via e-mail to guide the Petitioner, as being new to the GST Regime, is not aware of the procedure for reversing the ITC. Since no response was received by the Respondent, the Petitioner could not reverse excess ITC while submitting its return for the month of July 2018 which was later reversed by the Petitioner.
The Petitioner was issued a Show Cause Notice dated October 27, 2020 ("the SCN") demanding the interest along with penalty. The Respondent vide Order dated March 31, 2021 ("the Order") confirmed the demand of interest.
Aggrieved by the Order, the Petitioner filed the appeal wherein the Respondent vide Order dated April 29, 2022 ("the Impugned Order") held that the interest is payable on the amount Rs.21,13,354/- which was alleged to be wrongly utilized by the Petitioner and imposed penalty on the same.
Aggrieved by the Impugned Order, the Petitioner filed the writ petition before the Hon’ble Punjab and Haryana High Court, challenging the Impugned Order, Order, and SCN on the ground that, the notice was not issued by the Proper Officer. Also, the Petitioner has not utilized the amount of excess ITC and the Respondent did not respond to the query raised by the Petitioner regarding reversal of ITC. Therefore, the Petitioner is not required to pay any amount of interest or penalty.
Whether Penalty and Interest be imposed when Credit erroneously availed is not utilized by the Assessee?
The Hon’ble Punjab and Haryana High Court in the case of CWP No. 283 of 2023 held as under:
6 days Certification Course on GST Practical Return Filing Process