Patna High Court Cwjc v. Commissionerof Income Tax, Kolkata-I, (2012) 11 Scc 316 To Urge That Nopenalty Would Be Leviable In The Facts And Circumstances Of Thecase

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.9032 of 2023 ====================================================== M/s Munna Traders, having its place of business at Golapar, Barbigha, Townand District Sheikhpura, through its Proprietor Manoj Kumar, aged about 50thyears, Male, son of Late Raghu Sao, Resident of At P.O. and P.S. Barbigha,Town and District Sheikhpura. ... ... Petitioner/sVersus 1.The State of Bihar through the Commissioner, Department of State Taxes,Government of Bihar, Patna.Government of Bihar, Patna. 2.The Additional Commissioner of State Taxes (Appeal), Bhagalpur Division,Bhagalpur.Bhagalpur. 3.The Assistant Commissioner of State Taxes, Lakhisarai Circle, Lakhisarai. ... ... Respondent/s ======================================================Appearance :For the Petitioner/s: Mr. Manoj Kumar Keshri, AdvocateFor the Respondent/s: Mr. Vivek Prasad (GP7) ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHYORAL JUDGMENT(Per: HONOURABLE THE CHIEF JUSTICE) Date : 08-08-2023 The petitioner, an assessee, under the Bihar Goodsand Services Tax Act, 2017 (for brevity, ‘BGST Act’) isaggrieved with the interest and penalty imposed on the assesseefor excess claim of input tax credit, which stood paidsubsequent to a notice issued under the BGST Act. The orderimposing penalty is produced as Annexure-4 and an appealfiled, with delay, stood rejected on account of the delay being inexcess of that which is permitted condonation under Section107(4) of the BGST Act. 2. Learned counsel for the petitioner at the outsetsubmits that there is a further remedy available before theTribunal, which has not been constituted under Section 109 ofthe BGST Act. It is also pointed out that in many cases, thisCourt grants a stay of recovery on payment of 20% of thebalance tax due, till the Tribunal is constituted and an appeal isenabled. Further, it is pointed out that there was no excess claimof ITC and the petitioner has the invoices, which could beproduced and the Assessing Officer is enjoined upon to considerthe same as per the Circular bearing F. No.CBIC-20001/2/2022-GST, Government of India, Ministry of Finance, Department ofRevenue, Central Board of Indirect Taxes and Customs, GSTPolicy Wing, New Delhi, dated 27.12.2022. The payment madeof the excess claim was only under coercion of the respondent.Reliance is also placed on the decision of the Hon’ble SupremeCourt in Price Waterhouse Coopers Pvt. Ltd. v. Commissionerof Income Tax, Kolkata-I, (2012) 11 SCC 316 to urge that nopenalty would be leviable in the facts and circumstances of thecase. 3. The learned Government Advocate contended thatit was only in the scrutiny of the return, for the tax period July,2017 to March, 2018, that the discrepancies were noticed, on account of which notice was issued as per Annexure-A. Thepetitioner paid the differential amount of tax, but did not pay theinterest due, despite a notice issued under Section 73(1) of theBGST Act. It was hence the Assessing Officer passed the orderimposing interest and penalty to the tune of Rs.3,51,532/-. It isalso pointed out that there was eleven months delay in filing theappeal before the first appellate authority and there could nothave been a condonation of delay. The first appeal having beendismissed on the ground of delay, there is no scope for furtherappeal to the Tribunal, when even this Court would not beentitled to condone the delay beyond the period specificallyprovided under the enactment. The petitioner despite a noticefor remitting the interest due, having not remitted it, was liableto penalty, which cannot be absolved as per the statutoryprovisions. 4. The petitioner had filed the returns for theassessment year 2017-18 and on scrutiny under Section 61 ofthe BGST Act, three discrepancies were noticed. ITC claimunder GSTR-1 was found to be in excess of that under GSTR-2A/2B to the extent of Rs.4,62,542/-. The turn-over, as indicatedin GSTR-9C and RT-1 GTO, also were at variance. TheAssessing Authority also pointed out that the tax has been paid mainly by I.T.C. 5. A reply was filed by the petitioner in which it is stated that there was a discrepancy in the input tax credit claimonly because the invoices issued by the supplier had not beenuploaded on the GST portal. As far as the difference in turnover, it was stated to be as per the financial statement under theBihar Value Added Tax Act, the predecessor enactment. Insofaras the taxes being paid by the I.T.C, it was asserted that theinput tax credit ensured that there is no further tax liability onthe assessee/petitioner. 6. Admittedly, the assessee paid the difference ofinput credit tax amount coming to Rs.4,71,290/- as on08.12.2021 evidenced by Annexure-3. The assessee has made alaconic statement in the memorandum that it was under thecoercion of the respondent assessing authority that the amountof differential tax was paid up. We are not prepared to reckonsuch coercion having been employed, especially when thecontention is raised after two years in a writ petition filed. Eventhe appeal was delayed by eleven months. 7. As far as the delay occurred in filing the appeal, theHon’ble Supreme Court in Suo Motu Writ Petition (C) No. 3of 2020, In Re: Cognizance For Extension of Limitation due to the pandemic situation saved limitation between 15.03.2020 till28.02.2022. It was also directed that an appeal could be filedwithin ninety days from 01.03.2022. Hence, an appeal couldhave been filed on or before 29.05.2022, which provision wasnot availed by the petitioner herein. The Hon’ble Supreme Courtalso declared that if a longer period than 90 days is provided ina Statute, then that longer period will apply. In the BGST Act,u/s 107(4) there is a provision for condonation of delay, if theappeal is filed delayed, within one month of expiry of limitation.Even if that be deemed to be applicable then the appeal ought tohave been filed by 28.06.2022. 8. The appeal is filed only on 31.01.2023 after sevenmonths from the date on which even the limitation period asstipulated by the Hon’ble Supreme Court, expired. 9. In so far as the second appeal, as rightly pointed outby the Government Advocate, no appeal is maintainable fromthe order passed in the first appeal since it was dismissed on theground of delay. Section 107 of the BGST Act having provideda specific time within which a delayed appeal can be entertainedby the first appellate authority on sufficient cause for the delaybeing shown; there is no scope for a further appeal from anorder rejecting first appeal filed belatedly, beyond the time provided. The Tribunal or even this Court would not have thejurisdiction to direct such consideration. Hence, there is noscope for following the orders, similar to the one passed atAnnexure-7 (CWJC No.1920 of 2023 titled as Angel EngiconPrivate Limited v. The State of Bihar disposed of on16.02.2023). 10. Now, we come to the interest and penalty leviedon the petitioner and the applicability of the decision in the caseof Price Waterhouse Coopers Pvt. Ltd.(supra). provided. The Tribunal or even this Court would not have thejurisdiction to direct such consideration. Hence, there is noscope for following the orders, similar to the one passed atAnnexure-7 (CWJC No.1920 of 2023 titled as Angel EngiconPrivate Limited v. The State of Bihar disposed of on16.02.2023). 10. Now, we come to the interest and penalty leviedon the petitioner and the applicability of the decision in the caseof Price Waterhouse Coopers Pvt. Ltd.(supra). 11. In the cited decision, the Hon’ble Supreme Courtat the outset observed that the imposition of penalty in that casewas not justified on the facts of the case. Therein, a provisionfor payment of gratuity was claimed as deduction, in thestatement filed along with the return; which also contained afurther statement that the same is not allowable. The AssessingOfficer saddled the assessee with penalty at 300% of the taxsought to be evaded by furnishing inaccurate particulars. TheHon’ble Supreme Court directed the assessee to file an affidavitand based on the explanation offered found the mistakecommitted to be “silly mistake” which also stood acknowledgedby the Tribunal as well as by the High Court. On the particularfacts, the Hon’ble Supreme Court set aside the penalty imposed on the assessee under the Income Tax Act. 12. In the present case, it is seen that the assessee hasdefaulted tax payment, based on an excessive claim of input taxcredit, later deposited the input tax credit without interest dueunder Section 50; which attracted the penalty under Section 122.We have already found that there can be no coercion found insofaras the deposit is concerned. The assessee, hence, has admitted thediscrepancy with respect to excess claim of input tax credit andpaid the amounts due on which interest was also due under Section50 of the BGST Act. The non-payment of tax due and the failure topay interest attracted the penalty imposed. 13. The reliance on the Circular, in the facts of thepresent case is also not sustainable. The Circular was issued onlyto get over the difficulties in the nascent stage of the goods andservices tax regime. There was a specific method provided bywhich input tax credit claims could have been sustained even ifsome discrepancies in the various returns filed were noticed. Aprocedure was stipulated under paragraph 4 by which thediscrepancies could be rectified and the claim permitted by theAssessing Officer. The said procedure does not apply to thepetitioner-assessee since he has admitted the allegation of excessclaim and remitted the amounts due by way of tax. The petitioner -assessee has also not approached the Assessing Officer with the necessary evidence to substantiate the input tax credit; as providedin the Circular. We also have to notice paragraph-6 of the Circularwhich specifically indicates that the instructions in that Circularwill only apply to the ongoing proceedings inscrutiny/audit/investigation, etc. for the financial years 2017-18and 2018-19 and not to the completed proceedings. Theinstructions would also apply in the respective years with respectto any adjudication or appeal proceedings, pending. In the presentcase, there is no proceeding of scrutiny or appeal pending andthere cannot be any revision of the input tax credit since theallegation of excess claim has been admitted and differentialamount paid by the assessee. The penalty levied was proper and acivil liability, attracted on the failure to pay the tax due, on awrong claim of input tax credit. 14. We find absolutely no reason to entertain the writpetition and dismiss the same. (K. Vinod Chandran, CJ) (Partha Sarthy, J) Sunil/- AFR/NAFRAFRCAV DATEUploading Date11.08.2023Transmission Date