Petitioner | Shandong Teijun Electric Power Engineering Company Ltd. |
Respondent | State Tax Officer |
Decision by | Madras High Court |
Date of order or Judgement | 10-February-2022 |
Citation no. | W.P.No.1847 of 2022 2022 (2) GSTPanacea 71 HC Madras |
Hon’ble Judge | Justice R. Suresh Kumar |
Decision | Matter Remanded |
Wrongly Transitioned ITC-Alleged rectification of error to be rectified on its own merits. Impugned order is set aside.
Wrongly Transitioned ITC-Facts of the Case
Wrongly Transitioned ITC-The petitioner is a civil works contractor. He had secured registration under the erstwhile Tamil Nadu Value Added Tax Act, 2006 and subsequently, migrated into the Goods and Service Tax Regime under the Tamil Nadu Goods and Services Tax Act, 2017.
The petitioner had transitioned the available credit of taxes and input tax credits under the erstwhile TNVAT Act and CENVAT Credit into the GST regime by filing FORM GST TRAN-1 in accordance with the provisions of Section 140 of the CGST/TNGST Act.
The respondent allegedly issued show cause notices dated 21.12.2018, 05.09.2019 and 14.10.2019 to the project site of the petitioner in Cuddalore. Since the entire project was closed at Cuddalore site, the petitioner was not aware of those notices i.e., show cause notices, claimed to have been issued in this regard.
The respondent passed an assessment order dated 11.11.2020, directing the petitioner to pay alleged wrongly transitioned ‘Input Tax Credit’ [ITC] into GST Regime amounting to Rs.7,96,36,717/-along with interest and penalty.
The petitioner had filed rectification application under Section 161 of the GST Act. The said application now has been rejected by the respondent.
Argument Before Court
Wrongly Transitioned ITC-Petitioner’s Contention
The petitioner contends that for calculating the period of limitation the 90 days extension was given from 03.10.2021. If the 90 days was given from 03.10.2021, within which if the application now in question is filed, certainly that would be saved by the limitation extended by the Hon’ble Supreme Court of India.
Wrongly Transitioned ITC-Respondent’s Argument
The petitioner would submit that those notices had not been received by the petitioners as it seems to have been sent to the site address, which was already closed prior to the issuance of the notices.
Contend that when the impugned order was passed, rejecting the rectification application of the petitioner not only on the ground of limitation, but also on merits, where it has been dealt with by the respondent that there were at least three notices including notice for personal hearing was issued and all those notices having been sent to the petitioner, he has not chosen to reply or appear before the respondent, therefore, at this juncture, there is no scope for making any rectification of the alleged mistake or error as claimed by the petitioner.
Wrongly Transitioned ITC-The earlier show cause notices or notices for personal hearing issued to the petitioner, for which, the petitioner has not responded etc., cannot be cited as a reason for rejecting the rectification application as has been done in the impugned order.
All these reasons cited in the impugned order since cannot stand in the legal scrutiny, this Court has no hesitation to hold that the impugned order is liable to be set aside.
The impugned order is set aside. The matter is remitted back to the respondent for reconsideration. While reconsidering the same, the respondent shall borne in mind the independent nature of the decision making process with regard to the alleged rectification of error anything apparently on the face of the record to be rectified on its own merits, wherein after giving an opportunity of being heard to the petitioner, the rectification application shall be accordingly decided and disposed of within a period of six weeks.
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Shandong Teijun Electric Power Engineering Company Ltd.
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