Allowed

M/s. Msj Trades Impex Limited v. the Assistant Commissioner(St)

Madras HC28 Oct 2024WP/30909/2024

Case brief

AI extract

What is this about?

This common order involved five writ petitions challenging GST Department orders that reversed Input Tax Credit (ITC) claims and blocked bank accounts. The Court quashed the orders imposing limitation bars, relying on Section 16(5) of the CGST Act. It directed the Department to unfreeze bank accounts, drop recovery proceedings, and refund collected amounts while granting liberty to confront issues

What did the court decide?

Impugned orders quashed regarding limitation; bank accounts to be defrozen; recovery proceedings dropped; tax amounts to be refunded or adjusted.

M/s. Msj Trades Impex Limited Vs the Assistant… — GST and Indirect Tax | Madras HC (2024)

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W.P.No.30909 of 2024

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated : 28.10.2024

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CORAM

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THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY

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W.P.Nos.30909, 31456, 31461 & 31465 of 2024 & W.M.P.Nos.33491 & 33492, 34163, 34164 & 34166, 34174 to 34176, 34180 & 34181 of 2024

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M/s.MSJ Trades Impex Limited, GSTIN: 33AABCP6624K1ZE, No.81, NA, New Avadi Road, Chennai 600 010 Rep by its Director, Mr.Jatin Jain

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... Petitioner in W.P.No.30909 of 2024

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Pradeepa Enterprises, Rep by its Proprietrix Mr.M.Chitra, 10/28, Tirumalai Street, Venkateswara Nagar, Chennai 600 053.

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... Petitioner in W.P.No.31456, 31461 & 31465 of 2024

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Vs.

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1.The Assistant Commissioner (ST), Kilpauk Assessment Circle, No.F-50, 1^st Avenue, Anna Nagar (East), Chennai 600 102

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W.P.No.30909 of 2024

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2.The Branch Manager, Axis Bank, Kilpauk Branch, Kilpauk, Chennai 600 010.

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... Respondents in W.P.No. 30909 of 2024

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1.The Deputy Commercial Tax Officer, Thirumullaivoyal Zone III, Chennai North, Room No.115, 1^st Floor, Integrated Commercial Taxes Offices Building, No.32, Elephant Gate Bridge Road, Park Town, Chennai 600 003.

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2.The Assistant Commissioner (ST), Thirumullaivoyal Assessment Circle, Integrated Commercial Taxes Offices Building, No.32, Elephant Gate Bridge Road, Park Town, Chennai 600003

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3.The Branch Manager, Central Bank of India, AC-10, Second Main road, Anna Nagar, Chennai 600 040.

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.... Respondents in W.P.No.31456, 31461 & 31465 of

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2024

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Prayer in W.P.No. 30909 of 2024:

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Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records of the 1^st respondent in Ref.No.ZD331023168535L dated 27.10.2023 for the FY 2017-18 and quash the same and direct the 1^st respondent (1) to address the mismatch and discrepancies on the basis of

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W.P.No.30909 of 2024

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the reply made in ARN: ZD3303231358261 dated 27.03.2023 and (2) Release the bank accounts blocked in connection to the impugned order. Prayer in W.P.No.31456 of 2024:

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Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records in Ref.No.ZD330223084680M/2018-19 dated 17.02.2023 on the file of the 1^st respondent and quash the same as contrary to law and consequently, direct the 2^nd respondent to defreeze the bank current account No.3540295510 by attachment Notice in GST DRC-13 bearing GSTIN 33ALOPC8951F1Z1/ dated 05.01.2024 of the petitionerregistered taxable person.

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Prayer in W.P.No.31461 of 2024:

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Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records in Ref.No.ZD330423069108J/2019-20 dated 17.04.2023 on the file of the 1^st respondent and quash the same as contrary to law and consequently, direct the 2^nd respondent to defreeze the bank current account No.3540295510 by attachment Notice in GST DRC-13 bearing GSTIN 33ALOPC8951F1Z1/ dated 05.01.2024 of the petitionerregistered taxable person.

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Prayer in W.P.No.31465 of 2024:

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Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records in Ref.No.ZD3307230463698/2020-21 dated 12.07.2023 on the

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W.P.No.30909 of 2024

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file of the 1^st respondent and quash the same as contrary to law and consequently, direct the 2^nd respondent to defreeze the bank current account No.3540295510 by attachment Notice in GST DRC-13 bearing GSTIN 33ALOPC8951F1Z1/ dated 05.01.2024 of the petitionerregistered taxable person.

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Appearance in W.P.No.30909 of 2024

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For Petitioner : Mr.R.Swarnavel

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For Respondent : Ms.Amirta Poonkodi Dinakaran, Government Advocate Appearance in W.P.Nos.31456, 31461 & 31465 of 2024

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For Petitioner : Mr.S.Ramanan For Respondent : Mr.T.N.C.Kaushik, Additional Government Pleader, for R1 and R2

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COMMON ORDER

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These Writ petitions have been filed by the petitioners/taxpayers,

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who are registered dealers on the files of the respondent-Department under the provisions of the Goods and Service Tax Act, 2017 (GST Act)/ Central Goods and Services Tax Act ( CGST Act) as the case may be, challenging the orders passed by the respondent-Department, whereby, their claim of ITC was reversed/negatived and consequently, the

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W.P.No.30909 of 2024

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petitioners have been directed to pay tax/penalty/interest.

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As the issue involved in all these Writ Petitions, is identical in nature and the relief sought thereunder, is interconnected, these Writ Petitions are being disposed of vide this Common Order.

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When these Writ Petitions are taken up for hearing, the respective learned counsel for the petitioners and learned Senior Standing counsel for the respondents, would submit that the issue involved in the present Writ Petitions, has been squarely covered by the common order of this Court, dated 17.10.2024 passed in W.P.Nos.25081 of 2023, etc.,

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batch, wherein, this Court has categorically held in paragraphs 9 to 12 as under:

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“9. The petitioners in all these Writ Petitions are registered dealers on the files of the respondentDepartment under the provisions of the Goods and Service Tax Act, 2017/CGST Act 2017. Though the petitioners have filed GSTR-1 returns in time, however, insofar as claim of ITC is concerned, since the petitioners were faced with certain difficulties, such as

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W.P.No.30909 of 2024

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Financial constraints (as there was complete lock down due to outbreak Covid-19) health related ailments, fire accidents, they were unable to file GSTR-3B returns, which prompted them not raising their claim ITC in time before the prescribed date. Whereas, the respondent-Department without considering such vital aspects and that reasons for the delay is not deliberate, issued the show cause notices to the petitioners, proposing to reverse the ITC availed and went to the extreme level of confirming the proposals contained in the show cause notices by passing the impugned orders,whereby, the claim made by the petitioners for ITC was reversed and the petitioners have been directed to tax/penalty/interest. Aggrieved against the impugned orders, the petitioners are before this Court by way of present Writ Petitions seeking for setting aside the impugned orders.

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After the filing of these Writ Petitions, certain development took place, i.e. that 53^rd GST Council Meeting was held on 22.06.2024, and during the said Meeting, the GST Council recommended for extension of the deadline for availing ITC on any invoice or debit note under Section 16(4) of the CGST

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W.P.No.30909 of 2024

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Act and this extension would be applicable to any GSTR-3B returns filed for the Fys 2017-18, 2018-19, 2019-20 and 2020-21 with a new deadline deemed to be as ''30.11.2021'', to which, the Presidential Assent was also obtained by the Government of India on 16.08.2024, whereby, the financial proposals of the Central Government for the Financial Year 2024-25 was given effect to vide Finance Act, (No.2) of 2024, and in view of the aforesaid enactment, the Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs, issued a Notification, bearing No.17 of 2024-Central Tax, dated 27.09.2024, pursuant to which, a Circular No.237/31/2024-GST was issued by the Central Board of Indirect Taxes and Customs, which was addressed to all the Principal Chief Commissioners /Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All), thereby, clarifying the issues regarding implementation of provision of sub-section (5) and sub-section (6) in Section 16 of CGST Act, 2017, the impugned orders are no longer sustainable and liable to be quashed. In this context, it would be apposite to refer to both Section 16(4) of the CGST Act, 2017, as well as amendment made to Section 16 (4) by interpolations of

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sub-sections 16 (5) and (6), and by insertion of subsection (5) to Section 16, which are extracted herein under:-

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Section 16 (4)

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''A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the thirtieth day of November following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier.''

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Section 16 (5) :-

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''Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered persons shall be entitled to take input tax credit in any return under section 39 which is filed upto the thirtieth day of November, 2021.''

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10.1 Thus, a perusal of above Section 16 (5) makes it clear that 'notwithstanding anything contained in sub-section 4, referred to above, in respect of any invoice or debit note for supply of goods or

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W.P.No.30909 of 2024

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services or both pertaining to the Fys 2017-18 to 202021, the registered persons shall be entitled to take ITC in any return under section 39 which is filed upto the 30^th day of November, 2021.

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10.2 Thus, this Court considering the fact that the issue involved in all these Writ Petitions is only with regard to the availment of ITC, which is barred by limitation in terms of Section 16 (4) of the CGST Act, and in the light of the subsequent developments took place, whereby, Section 16 of the CGST Act was amended and sub-section (5) was inserted to Section 16, which came into force with retrospective effect from 01.07.2017, the petitioners are entitled to avail ITC in respect of GSTR-3B filed in respect of FYs 2017-18, 2018-19, 2019-20 and 2020-21 as the case may be, on or before 30.11.2021, is inclined to quash the impugned orders.

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Accordingly, this Court passes the following orders.

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i) The orders impugned in all Writ Petitions are quashed insofar as it relates to the claim made by the petitioners for ITC which is barred by limitation in

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terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act.

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ii) Therefore, the respondent-Department is restrained from initiating any proceedings against the petitioners by virtue of the impugned orders based on the issue of limitation.

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iii) In view of the fact that the impugned orders are quashed, the respondent-Department is directed to take immediate steps towards de-freezure of the concerned petitioners bank accounts, which have been freezed in furtherance of the impugned orders, by sending intimation to the concerned bankers.

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iv) In the event, in the interregnum, i.e. during the pendency of these Writ Petitions, if any orders are proposed to be passed towards recovery, same shall be dropped immediately upon production of the order copy by the petitioners, in whichever case, where, there is no interim order.

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W.P.No.30909 of 2024

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orders of this Court or even in the absence of any order from this Court, if any amount is deposited either in the cash ledgers/credit ledgers of the petitioners concerned, the same is permitted to be utilized/adjusted by the petitioners towards payment of future tax.

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vi) Insofar as the apprehension expressed by the learned Additional Advocate General for the respondent-Department that in certain Writ Petition apart from the issue on limitation, challenges have also been made to the order related to issues such as discrepancies in availing the ITC/wrong availment of ITC/excess claim of ITC/Fake ITC claim, as the case may be, or such other issues, liberty is be granted to the respondent-Department to proceed against the assessees/petitioners in furtherance of the impugned orders in accordance with law.

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In the result, all the Writ Petitions are allowed on the aforesaid terms. No costs. Consequently, connected Miscellaneous Petitions are closed.”

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W.P.No.30909 of 2024

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Therefore, the learned counsel for the petitioners would

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submit that the above said order will hold good for the present Writ Petitions also and hence, prayed to dispose of the Writ Petitions. The learned Senior Standing counsel for the respondents would fairly accede to the same.

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In view of the above, this Court passes the following:

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i) The orders impugned in all Writ Petitions are quashed insofar as it relates to the claim made by the petitioners for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act.

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ii) Therefore, the respondent-Department is restrained from initiating any proceedings against the petitioners by virtue of the impugned orders based on the issue of limitation.

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iii) In view of the fact that the impugned orders are quashed, the respondent-Department is directed to take immediate steps towards de-freezure of the concerned petitioners bank accounts, which have

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been freezed in furtherance of the impugned orders, by sending intimation to the concerned bankers.

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v) It is also made clear that if at all, if there is any tax amounts were collected from the petitioners based on the impugned assessment orders from the cash ledgers/credit ledgers of the petitioners concerned, the same shall be refunded to them or by means of orders of this Court or even in the absence of any order from this Court, if any amount is deposited either in the cash ledgers/credit ledgers of the petitioners concerned, the same is permitted to be utilized/adjusted by the petitioners towards payment of future tax.

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vi) Insofar as the apprehension expressed by the learned Additional Advocate General for the respondent-Department that in certain Writ Petition

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apart from the issue on limitation, challenges have also been made to the order related to issues such as discrepancies in availing the ITC/wrong availment of ITC/excess claim of ITC/Fake ITC claim, as the case may be, or such other issues, liberty is be granted to the respondent-Department to proceed against the assessees/petitioners in furtherance of the impugned orders in accordance with law.

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Accordingly, these Writ Petitions are allowed on the aforesaid terms. No costs. Consequently, connected Miscellaneous Petitions are closed.

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28.10.2024

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Speaking/Non-speaking order Index : Yes / No Neutral Citation : Yes / No nsa/suk

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1.The Assistant Commissioner (ST), Kilpauk Assessment Circle, No.F-50, 1^st Avenue, Anna Nagar (East), Chennai 600 102

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2.The Branch Manager, Axis Bank, Kilpauk Branch, Kilpauk, Chennai 600 010.

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The Deputy Commercial Tax Officer, Thirumullaivoyal Zone III, Chennai North, Room No.115, 1^st Floor, Integrated Commercial Taxes Offices Building, No.32, Elephant Gate Bridge Road, Park Town, Chennai 600 003.

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4.The Assistant Commissioner (ST), Thirumullaivoyal Assessment Circle, Integrated Commercial Taxes Offices Building, No.32, Elephant Gate Bridge Road, Park Town, Chennai 600003

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5.The Branch Manager, Central Bank of India, AC-10, Second Main road, Anna Nagar, Chennai 600 040.

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W.P.No.30909 of 2024

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KRISHNAN RAMASAMY.J.,

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nsa

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W.P.Nos.30909, 31456, 31461 & 31465 of 2024

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28.10.2024

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M/s. Msj Trades Impex Limited v. the Assistant Commissioner(St)

Case brief

What is this about?

What did the court decide?

M/s. Msj Trades Impex Limited v. the Assistant Commissioner(St)

Case brief

What is this about?

What did the court decide?

What the court decided

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