Order date – 4 April 2023

Parties – Sri Jahar Sur Chowdhury Vs. The Union of India & 5 Ors.

Facts –

• The Petitioner, SRI JAHAR SUR CHOWDHURY, claimed Rs.63,93,317.00 as Input Tax Credit (ITC) in GSTR-3B while filing the return for the month of July, 2019, although the ITC available in GSTR-2A was only Rs.13,33,407.
• Departmental officer initiated investigation proceeding in section 74 of the CGST Act and asked Petitioner to reverse such Input tax credit with due interest and penalty at the rate 15%.
• Upon realizing the error, the petitioner reconciled the purchase record based on inward supply invoices and reversed the excess claim of ITC before the issuance of notice by the GST Department.
• The petitioner further stated that at the time of reversal of ITC of Rs.47,36,977, the same was posted in the outward GST liability in January, 2020, and that liability was discharged by utilizing the available ITC in the ledger.
• .

Issue –

• Whether Section 74 of the CGST Act, 2017 applicable to the present case?

Order –

• The court after considering the facts and arguments presented by both parties, finds a contradiction between the order of the adjudicating authority and the order of the appellate authority.
• As a result, Section 74 of the CGST Act does not apply to this case since no case has been made out in the show cause notice as well as in the impugned orders which are under challenge and the same are liable to be set aside and quashed..
• The court sets aside and quashes the impugned orders dated 06.01.2021 and 30.03.2022 and remands the matter back to the relevant authority for fresh consideration in accordance with the law.
• Therefore, the writ petition is allowed and disposed of.