Indirect Tax Judgement No 1

01.01.2024

Sub: Inadvertent mistake in reporting of data

Synopsis

Transitional provisions – Inadvertent error – Cenvat credit – Filing claim under inapplicable head – Assessee, partnership firm claimed Cenvat credit on stock of goods – Claim was inadvertently filed under column 7(d) instead of making TRANS 1 Claim under column 7(b) – Revenue authority issued show cause notice and later rejected claim on ground that assessee had filed claim under inapplicable head – HELD: Since assessee had documents to support his claim under correct head matter should be remitted to revenue authority for reconsideration – Impugned order passed was to be set aside – Revenue authority was further directed to consider assessee’s claim under correct head and grant consequential relief if claim was established [Section 140, of Central Goods and Services Tax, 2017/ Karnataka Goods and Services Act, 2017 – Rule 117 of Central Good and Services Tax Rules, 2017/Karnataka Goods and Services Tax Rules, 2017] [Paras 9 and 10] [In favour of assessee/Matter remanded]

Facts

1. The petitioner is a partnership firm registered under the Goods and Services Tax Act, 2017. The petitioner is engaged in supply of goods coming under the Chapter 8432, 31010010 and 10091090. Respondent No. 1 has issued show cause notice dated 9-12-2022 on the premise that GST returns submitted by the petitioner were the subject matter of scrutiny and sought explanation from the petitioner.
2. The petitioner has replied to the said notice and claimed CENVAT Credit of Central Excise duty on the stock of goods held on 30-6-2017, for Rs. 6,18,796/-. Pursuant to the reply, hearing was fixed on 24-1-2023. Petitioner further claims that he has produced additional documents in support of his defence. Thereafter respondent No. 1 issued one more notice dated 6-2-2023 on the premise that the petitioner has filed TRAN-1 claim under Table 7(d) in terms of Rule 117(4) of Central Goods and Services Tax Rules, 2017 and took a view that the petitioner is not entitled to CENVAT credit.
3. It is the case of the petitioner that he made a claim under column ‘7(d)’ inadvertently, instead of making a TRAN-1 claim under column ‘7(b)’. The petitioner however submits that error is inadvertent and he has the documents to support his claim for necessary credit under the Head ‘7(b)’.
4. Learned counsel for the petitioner in reply would contend that the Madurai Bench of Madras High Court has dealt with similar issue where the claim is inadvertently made under the inapplicable head and the Writ Court entertained the petition and issued a direction to the respondent-Authority to verify the claim of the petitioner and if the claim is found to be supported by materials, to grant necessary relief as available under law. This Court has perused the aforementioned judgment.
5. From the aforementioned judgment, in W.P.(MD) No. 15531/2020 and W.M.P.(M.D.) NO.13042/2020, it can be noticed that in the said case, the claim was made under Column 7(d) of the Form instead of 7(a) and while allowing the writ petition, the Court directed the respondents to forward the petitioner’s application to the concerned authority. It directed the concerned authority to verify the correctness of the claim made. It further directed that if satisfied with respect to the claim, the authority shall grant the relief sought in the writ petition.

Held

9. This Court has also perused the records in the case. The petitioner makes claim that he ought to have filed returns under by making a claim under Column 7(b) and erroneously he made a claim under Column 7(d). Since the petitioner has claimed that he has necessary invoices and documents to support his claim under column ‘7(b)’, this Court is of the view that the impugned order is to be set aside. The matter is remitted to respondent No. 1.

10. Respondent No. 1 shall consider the claim of the petitioner under Column 7(b) of CGST Rules, 2017 if there are supporting documents to make a claim under Column 7(b). If the claim is established, then the consequential relief should follow.

Ref: S V Halavagali & Sons v. Superintendent of Central Excise [2023] 157 taxmann.com 711 (Karnataka HC) WRIT PETITION NO. 102048 OF 2023 (T-RES) DT 03.11.23