The Kerala High Court has held that the electronic credit ledger is a wallet, availment of Input Tax Credit (ITC) benefit does not amount to be wrongful.
The bench of Justice Bechu Kurian Thomas relied on the decision in the case of Rejimon Padickapparambil Alex v. Union of India and Others in which it was observed that the electronic credit ledger is in the nature of a wallet with different compartments of Integrated Goods and Services Tax, Central Goods and Services Tax and State Goods and Services Tax and there cannot be any wrong availment of input tax credit merely because a taxpayer had availed the benefit of credit of input tax available in IGST under the heads CGST and SGST.
The bench noted that as per the order of assessment produced the alleged mistake committed by the petitioner is by availing the benefit of Input Tax Credit available in IGST, under the heads CGST and SGST. The method of availing ITC cannot be to be a wrongful availment of Input Tax Credit warranting the imposition of any penalty as observed in the above referred judgment. Therefore, it is only appropriate that the order of assessment itself is set aside and a reconsideration be directed by the proper officer.
The petitioner/assessee has challenged the order of assessment with respect to the assessment year 2017-2018. As per the order, petitioner was found to have utilised Input Tax Credit in excess and hence a liability to the extent of Rs.19,94,818/-, was imposed on it under Section 73 of the Central Goods & Services Tax Act, 2017, and State Goods and Services Tax Act, 2017.
An appeal has also been preferred by the petitioner before the Appellate Authority as early as on 22.03.2024. Despite the lapse of almost eight months, the appeal has not yet been disposed of.
The court while allowing the writ petition, directed the proper officer to reconsider the matter afresh in the light of the decision in Rejimon Padickapparambil Alex’s case, after granting an opportunity of hearing within a period of three months.
Read More: Difference Between Electronic Cash Ledger And Electronic Credit Ledger Under GST
Case Details
Case Title: Star Roofs And Metals Versus The Assistant Commissioner
Case No.: WP(C) NO. 44100 OF 2024
Date: 11/12/2024
Counsel For Petitioner: Akhil Suresh
Counsel For Respondent: Thushara James
