2025 (4) TMI 1382 - HC - GST

Legality of an assessment initiated under Section 74 of the Central Goods and Services Tax Act 2017 - reversal of ITC - HELD THAT - Since jurisdictional aspect leading to framing assessment under Section 74 of the CGST Act has been questioned the matter requires consideration. Adequate number of copies of writ petition be served on the Senior Standing Counsel to enable him to file counter-affidavit. List this matter on 17th June 2025.

Summary

The Orissa High Court, in W.P.(C) No.6441 of 2025, addressed the legality of an assessment initiated under Section 74 of the Central Goods and Services Tax Act, 2017 ("CGST Act") against the petitioner. The petitioner had reversed input tax credit amounting to Rs.1,49,729/- for 2017-18 and paid the amount prior to audit initiation. Counsel for the petitioner argued that the assessment under Section 74 was improper since the payment was made before audit and that the imposition of interest under Section 50(3) and penalty was unwarranted. He contended that assessment under Section 73 would have allowed the petitioner to benefit from the notification dated 15th October 2024, particularly paragraph 1.3, which provides for waiver of interest or penalty if full payment is made by specified dates.The Court recognized the challenge to the jurisdictional basis for framing assessment under Section 74 and directed service of the writ petition on the Senior Standing Counsel for GST to file a counter-affidavit. As an interim relief, the petitioner was permitted to deposit the interest amount within four weeks, and upon such deposit, the penalty demand dated 3rd January 2025 was stayed. The matter was listed for further hearing on 17th June 2025.