The Madras High Court has granted a 30-day period for filing a statutory appeal under the GST (Goods and Services Tax) Act, following the failure of the petitioner’s Chartered Accountant ( CA ) to file the appeal on time.
This decision pertains to a case where B.G. Shirke Construction had contested a demand for availment of ineligible Input Tax Credit ( ITC ) issued without complying principles of natural justice.
The petitioner is registered dealer under the VAT Act, received a notice on April 18, 2022, from the respondent for the assessment year 2016-17. The notice indicated that the Input Tax Credit claimed on capital goods amounting to ₹6,05,267 was ineligible and needed to be reversed. The notice also proposed penalties under Section 27(4) and interest under Section 42(3) at 24% per annum.
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It acknowledged the inadvertent error in claiming the ITC but argued that since the ITC was claimed but not utilised, and a refund for the excess ITC was sought, penalties and interest should not apply.
The petitioner paid ₹6,05,236 for the ineligible ITC and relied on previous orders which were not considered by the respondent. The respondent’s final order on April 21, 2022, confirmed the interest amounting to ₹7,19,555 and a penalty of ₹3,02,634. The petitioner’s subsequent petition under Section 84 of the TNVAT Act was also rejected.
The counsel claimed that the petition company had initially entrusted the case to Chandrasekar, a Sales Tax Practitioner, who assured that an appeal had been filed. However, upon seeking updates, the petitioner learned of Chandrasekar’s death and discovered that no appeal had been filed, with the appeal period having expired. Consequently, the petitioner filed a writ petition challenging the order.
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The department’s counsel argued that since no appeal had been filed, the petitioner should be directed to pay 25% of the disputed tax demand. In contrast, the Mr.P.R.Kumar, the company’s counsel clarified that the entire demand amount had already been settled. Considering the petitioner’s submissions, the bench of Justice Krishnan Ramasamy decided to grant the petitioner 30 days to file the appeal. The Appellate Authority was instructed to accept the appeal and verify the amount already paid by the petitioner.
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