Factual Dispute Whether Appellant Reversed Wrongfully Availed GST ITC: Calcutta HC remands for Appellate Readjudication [Read Order]

The Calcutta HighCourt recently remanded a case, observing that whether the appellant had rightfully reversed Goods and Services Tax (GST) Input Tax Credit (ITC) that had been wrongfully availed by them.

The case traces back to a show-cause notice, served via e-mail to the appellant by the Assistant Commissioner, Central Goods and Service Tax and Central Excise, Dinajpur Division, Raiganj, Uttar Dinajpur.

The notice went unanswered by the appellant, resulting in an ex parte adjudication order dated 14th December 2023, holding that the appellant had wrongfully availed ITC not available to them.

Aggrieved by the adjudication, the appellant unsuccessfully preferred an appeal before the Additional Commissioner of CGST & Central Excise (Appeal), Siliguri. The appellants’ core submission before the appellate authority was that the reversal of the ITC had already been effected as was reflected in the GSTR-3B returns and a tabulated statement for the financial year 2017-18 that were filed. Despite this, the appellate authority observed that the GSTR-3B for August 2017 was not produced.

Since no dedicated GST appellate tribunal had been constituted by then, the case was appealed before this High Court under writ jurisdiction. The High Court initially granted an interim order on 13th June 2025, directing the appellant to deposit 10% of the tax in dispute.

The Division Bench comprising Chief Justice T.S. Sivagnanam and Justice Bivas Pattanayak noted that the core issue was a factual dispute as to whether the ITC in question had already been reversed by the appellant.

The Court remarked that if the reversal had indeed been effected, the issue would be revenue neutral, making any pre-deposit redundant. It was further observed that no interest was levied by the adjudicating authority, suggesting possible reversal of ITC.

Recognizing that the present matter required the appreciation of facts, the Bench held that the appellant ought to be given a further opportunity to place all relevant materials before the original adjudicating authority.

Accordingly, the High Court set aside the order of the appellate authority and remanded the matter to the Assistant Commissioner, Central Goods and Service Tax and Central Excise.

The appellants were directed to treat the impugned order dated 14th December 2023 as a show-cause notice, and to file a detailed reply with all supporting documents within 15 days from the date of this order while the adjudicating authority was instructed to afford a personal hearing and pass a fresh order in accordance with law.

The appellants were represented by Himangshu Kr. Ray, Shiwani Shaw, Sushant Bagaria, Animitra Roy, Anish Mondal and Piyash Chowdhury. The Revenue was represented by Bhaskar Prasad Banerjee and Tapan Bhanja while Indrani Chakraborty appeared for the Union of India.

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