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TMI Blog2023 (10) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... Value Added Tax Act, 2003 (For short "VAT Act"). After introduction of Central Goods and Service Tax Act, 2017 (For short "CGST Act") w.e.f. 01.07.2017, it had migrated into GST regime and got itself registered under the CGST Act. It was submitted that in the month of July 2017, the petitioner had available with it a sum of Rs. 2,41,50,783/- as ITC for discharging its output central tax liability for that month. The said ITC was on account of credit availed on inputs during the month of July 2017 and cenvat credit transaction from the erstwhile VAT regime. The petitioner debited its electronic credit ledger with an amount of Rs. 1,59,55,219/- towards its central tax liability for that month and thereafter was left with balance of Rs. 81,95,564/- as ITC. During the month of August 2017, the petitioner was entitled to avail ITC to the extent of Rs. 1,40,57,836/-. However, while making entry in the electronic credit ledger and filing return for the month of August 2017, inadvertently the petitioner typed the amount of ITC as Rs. 14,05,78,663/- instead of Rs. 1,40,57,836/- thereby claiming excess ITC to the tune of Rs. 12,65,20,827/-. For that particular month, the central tax liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice, the respondents No. 3 and 4 filed a joint written statement whereas a separate written statement had been filed by respondent No. 5. It was submitted by the respondents that the show cause notice was issued by proper officer. The petitioner had availed excess ITC and reversed it after a gap of about one year and as he had wrongly utilized the ITC credit for payment of its central tax liabilities, therefore, it was liable to pay interest on availment of excess ITC as per Section 50 (3) of the CGST Act as well as the penalty and the impugned orders had been rightly passed. Therefore, dismissal of the writ petition had been prayed for. 7. We have heard learned counsel for both the parties at considerable length and have carefully gone through the record. 8. It may be mentioned at the outset that the plea taken in the writ petition that the impugned show cause notice had not been issued by a proper officer having jurisdiction, had not been pressed by learned counsel for the petitioner during the course of arguments and the arguments rendered by him were restricted to the question on validity of order dated 29.04.2022 as passed by the respondent No. 4 whereby interest on amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove that it had availed the said amount in excess and had utilized the same in terms of provisions of Sub- Section 3 of Section 50 of the CGST Act and, therefore, the petitioner was liable to pay interest as well as penalty on the excess amount. He submitted that the respondent No. 4 was competent to modify the order of adjudicating authority under Section 107 (II) of the CGST Act and had rightly levied penalty equivalent to the demanded amount that was mandatory. With these submissions, it was argued that the impugned order did not suffer from any error or irregularity and did not warrant any interference. 10. On giving due deliberations to the contentions as raised by both the sides and on a perusal of the material placed on record, it emerges that there is no dispute between the parties about the fact that during the month of August 2017, the petitioner was entitled to take ITC of Rs. 1,40,57,836/- and had claimed an amount of Rs. 14,05,78,663/- instead of the abovesaid amount. Meaning thereby that it had taken excess ITC to the tune of Rs. 12,65,20,827/- in its return of the said month. It is also not in dispute that the petitioner had reversed the amount so taken in excess a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra), wherein a Bench of this Court had held that where the cenvat credit was wrongly availed and was reversed before utilizing the same, there was no justification for demand of interest and upon Grasim Bhiwani Textile Ltd.'s case (Supra), wherein a Coordinate Bench of this Court was dealing with a similar question in a case under Central Excise Act, 1944. The assessee had been availing credit of service tax paid on input service. The department pointed out that the credit so availed was not admissible to the assessee and then the assessee reversed the credit amount. A show cause notice demanding interest and penalty was issued and confirmed. It was held that the cenvat credit if reversed prior to utilizing, demand of interest and penalty was untenable. Similar proposition of law was laid down by High Court of Adjudicature at Patna in M/s Commercial Steel Engineering Corporation v. State of Bihar and others, 2019 (28) G.S.T.L. 579. 12. On a perusal of Annexure P-5 which is extract of electronic credit ledger during the period from August 2017 till December 2018, it is revealed that an amount of Rs. 14,05,78,663/- was entered as amount of ITC accrued through inputs as in August ..... X X X X Extracts X X X X X X X X Extracts X X X X
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