Calcutta HC Remands GST ITC Dispute to Appellate Authority after Customs Clarifies Manual Bills of Entry Issue [Read Order]
Pursuant to Court’s directions, Customs Department filed an affidavit stating that satisfactory action had been taken
The Calcutta High Court has set aside an ex-parte appellate order confirming GST ( Goods and Services Tax ) demand on account of alleged excess availment of ITC on import of goods.
The Court, thus, remanded the matter to the appellate authority for fresh consideration in light of reports filed by the Customs Department.
The petitioner, M/s. Amar Iron Udyog Pvt. Ltd., challenged an appellate order dated April 21, 2025 passed under Section107 of the West Bengal GST Act, 2017 and the CGST Act, 2017. The order dismissed the appeal against an adjudication order issued under Section 73 and held that the assessee was liable for payment of output tax and excess availment of ITC.
The petitioners contended before the High Court that their challenge pertained to two issues. First, the allegation of excess availment of ITC on imports due to non-production of IGST payment documents. Second, the direction to reverse ITC due to suppliers’ failure to file GST returns. It was also submitted that the appellate order had been passed ex-parte, depriving the petitioners of a hearing.
On examining the records, the High Court noted that the finding of excess availment of ITC was based on the ground that certified documents for payment of IGST were not produced. Since the issue related to import of goods, the Court directed the Customs authorities to file a report clarifying whether IGST had been paid in respect of the bills of entry.
Pursuant to the Court’s directions, the Customs Department filed an affidavit explaining that the bills of entry in question were processed manually. And despite of IGST having been paid and goods cleared, the “Out of Charge” details were not contemporaneously captured in the ICES system. As a result, the IGST paid did not initially reflect on the GST portal. It was further stated that action had been taken and IGST details were reflected on the GST portal for all eight bills of entry.
Justice Om Narayan Rai, in his order, set aside the appellate authority’s observations relating to excess availment of ITC on imported goods and remanded the matter for reconsideration in light of the Customs reports.
With respect to the second issue concerning reversal of ITC due to non-filing, it was observed that the petitioners had failed to explain their absence before the appellate authority. The Court, therefore, permitted reconsideration of this issue upon payment of costs of ₹15,000 to the High Court Legal Services Committee, Calcutta.
The writ petition and the connected application were disposed of accordingly.
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