Appellate Authority's Decision on Input Tax Credit Reversal Deemed Perversely Issued; Ordered for Reassessment
In a significant ruling, the Calcutta High Court has quashed an appellate authority's order regarding the reversal of Input Tax Credit (ITC) under the Goods and Services Tax Act, 2017. The case, titled "Soumyendu Bikash Jana v. State of West Bengal," was heard by Justice Om Narayan Rai, who found that the appellate authority failed to consider crucial documents submitted by the petitioner, leading to a perverse dismissal of the appeal.
The petitioner, Soumyendu Bikash Jana, faced allegations of short paying taxes on outward supplies for the period between April 2018 and March 2019 and was ordered to reverse excess ITC availed. The petitioner contested this order, providing substantial documentation to support his claim of not availing excess ITC. However, the appellate authority dismissed his appeal on July 18, 2025, prompting the writ petition.
Justice Rai, upon reviewing the materials submitted in the writ petition, noted the appellate authority's oversight in not evaluating the documents that could potentially substantiate the petitioner’s claims. The court emphasized that non-consideration of such materials rendered the appellate order perverse.
Consequently, the High Court set aside the appellate authority's decision and remanded the matter for a fresh assessment. The court directed the appellate authority to reconsider the petitioner's appeal, allowing the submission of additional replies or evidence to support his case. The reassessment is to be concluded within six weeks, as per the court's instructions.
In his defense, the petitioner highlighted that his dealings involved exempted goods and services as a Goods Transport Agency (GTA), and thus, he was not liable for ITC reversal. He further asserted that taxes on taxable goods were duly paid, negating any claims of excess ITC.
The High Court refrained from delving into the merits of the petitioner's case, leaving all issues open for determination by the appellate authority in accordance with the law. No costs were imposed, and the matter was disposed of with directives for expedited processing of certified photocopies of the order if requested.
Bottom Line:
GST - Appellate authority must properly consider all documents submitted by the appellant in support of their case. Non-consideration of material documents amounts to perversity.
Statutory provision(s): Goods and Services Tax Act, 2017 Sections 73 and 107
Soumyendu Bikash Jana v. State of West Bengal, (Calcutta) : Law Finder Doc Id # 2829066
