Mere filing of GSTR-3B with late fees will not exonerate delay in claiming ITC beyond period specified U/s 16(4): HC

The High Court of Andhra Pradesh in the matter of Thirumalakonda Plywoods Vs. The Assistant Commissioner has made 3 important observations:

(i) Point No.1: The time limit prescribed for claiming ITC U/s 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India.

(ii) Point No.2: Section 16(2) of APGST/CGST Act, 2017 has no overriding effect on Section 16(4) of the said Act as both are not contradictory with each other. They will operate independently.

(iii) Point No.3: Mere acceptance of Form GSTR-3B returns with late fee will not exonerate the delay in claiming ITC beyond the period specified U/s 16(4) of APGST/CGST Act, 2017.

Petitioner is a sole proprietorship doing business in hardware and plywood with the trade name “Tirumalakonda Plywoods” commenced during Covid-19 pandemic and registered under APGST Act and CGST Act during March, 2020.

While so, petitioner received email dated 16.12.2021 U/s 74(1) of SGST /CGST Act r/w Section 20 of IGST Act, 2017 by the 1st respondent stating that the petitioner availed input for March, 2020 and sought reply in the light of Gazette notification of CCT’s Ref.No.CCW/GST20015-A, dt; 30.0.6.2017.

Though the above notice was sent through a private Gmail ID and not following the procedure under rule 142 (1) of APGST Rules, 2017 and not served through its GST common portal or specified any time for reply as per Form GST DRC-01, still the petitioner submitted reply through e-mail dated 17.01.2022 with its Form GST DRC-06 and enclosed Annexure-I wherein the petitioner sought an opportunity U/s 74(5) of APGST Act, 2017, since the petitioner not only discharged late fee for delay in filing the return but also challenged notice with his detailed submissions.

Instead of considering petitioner’s reply in Form GST DRC 06, the 1st respondent surprisingly sent a personal hearing notice dated 22.02.2022 through private e-mail ID stating that the petitioner did not file reply against their notice nor opted for personal hearing and hence he has to file reply on or before 22.02.2022 and attend personal hearing on 02.03.2022.

Order

The Coram have gone through the citations relied upon by the petitioners. They are mostly facts oriented decisions wherein it was observed that when the delay for filing returns was properly explained, penalty was not impossible. They are not touching upon the vires of Section 16 of APGST/CGST Act.

Thus on a conspectus of facts and law, they hold:

(i) Point No.1: The time limit prescribed for claiming ITC U/s 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India.

(ii) Point No.2: Section 16(2) of APGST/CGST Act, 2017 has no overriding effect on Section 16(4) of the said Act as both are not contradictory with each other. They will operate independently.

(iii) Point No.3: Mere acceptance of Form GSTR-3B returns with late fee will not exonerate the delay in claiming ITC beyond the period specified U/s 16(4) of APGST/CGST Act, 2017.

(iv) Point No.4: With regard to these contentions, a perusal of impugned Assessment Order dated 14.02.2022 passed by the 1st respondent shows that the present contentions that the notice was not issued in proper form and that no opportunity was granted for hearing etc., which were taken in objections 1 to 10 of the reply by the petitioners were vividly discussed and rejected by the 1st respondent. Hence we see no force in the present contentions.

Thus on a conspectus of facts and law and in view of findings in Points 1 to 4, the writ petition is dismissed. No costs.

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