The High Court reversed the order imposing interest, finding that interest is only applicable when the ITC is both claimed and used.
28 Aug, 2024
4155 View
A court case involving a registered taxpayer who mistakenly availed excess Input Tax Credit (ITC) but reversed it before receiving a show cause notice. The authorities demanded interest and penalty on the excess ITC, but the court ruled in favor of the taxpayer.
Key Points:
- The taxpayer accidentally claimed excess ITC due to a filing error.
- The excess ITC was reversed by debiting the electronic credit ledger before a show cause notice was issued.
- The court determined that interest can only be charged on ITC that is both availed and utilized.
- Issuing a notice in Form GST DRC-01A doesn't automatically initiate proceedings under Section 73 of the Act.
- The taxpayer's actions were deemed compliant, and the levied interest and penalty were quashed.
Case Breakdown:
- The taxpayer mistakenly claimed excess ITC.
- They reversed the excess ITC by debiting their electronic credit ledger.
- Despite the reversal, authorities demanded interest and penalty.
- The taxpayer challenged this demand in court.
- The court ruled that interest can only be charged on utilized ITC.
- Since the reversed ITC wasn't utilized, the interest and penalty were invalid.
GST Case Law Utpal Das Versus The State of West Bengal
Citation-2024 TAXONATION 2007 (CALCUTTA)
CLICK HERE TO READ FULL CASE LAW/DOWNLOAD FROM ABOVE GIVEN PDF OPTION
OR
SUBSCRIBE GST E-LIBRARY (INDIA'S HIGHEST GST CASE LAW DATA)
FOR MORE UPDATE ON GST/ IT JOIN OUR FREE WHATSAPP GROUP BY CLICKING ON THIS LINK https://chat.whatsapp.com/C8VB6F6VHme3A061UDQKhj
Comment: