ITC Disallowance Without Reasons Stayed by Calcutta High Court

Case Title: Amar Nath Jaiswal vs. The Assistant Commissioner of State Tax, Howrah and Kadamtala Charge & Ors.
Court: High Court at Calcutta, Constitutional Writ Jurisdiction, Appellate Side
Petition No.: WPA 1860 of 2025
Date of Order: 23.04.2025
Category of Dispute: Input Tax Credit (ITC) Reversal
Relevant Sections: Section 73(9) & 73(10), Section 44(1), Section 168A of CGST/WBGST Act, 2017; Rule 80 of CGST Rules, 2017

Facts of the Case

• The petitioner challenged the order dated 28.08.2024 passed under Section 73 of the CGST/WBGST Act relating to FY 2019-20, alleging it was passed beyond the statutory limitation period under Section 73(10) (¶2).

• The petitioner argued that notifications dated 31.03.2023 and 28.12.2023, extending the time limit under Section 168A, were invalid as no force majeure existed (¶3).

• The dispute arose from reversal of ITC due to retrospective cancellation of registration of three suppliers. While two suppliers were accepted as genuine, ITC for one supplier – Shree Shyam Iron Steel Trading Company – was disallowed without assigning any reasons, despite production of invoices, ledgers, and e-way bills (¶4).

Questions in Consideration

1. Whether the order passed under Section 73(9) beyond the period prescribed in Section 73(10) was legally sustainable in light of extensions under Section 168A? (¶2–3)

2. Whether ITC reversal against one supplier without assigning reasons amounted to a failure of jurisdiction? (¶4)

Observations of the Court

• The Court noted that the petitioner had furnished all relevant supporting documents for purchases from the suppliers (¶4).

• The Court observed that the officer accepted the petitioner’s explanation for two suppliers but disallowed ITC for one without any reasoning, which required clarification from the State (¶5).

• Considering the prima facie illegality, the Court granted interim protection by staying the impugned order (¶7).

Judgement of the Court

• The matter was adjourned for further hearing on 28.04.2025 to allow the State to obtain instructions (¶6).

• Stay granted: The impugned order under Section 73 shall remain stayed until the next date (¶7).

Between Fine Lines (Simplified Outcome)

• The GST department extended the time for passing order under Section 73 using Section 168A, which the taxpayer disputed as invalid.

• ITC was denied for one supplier despite full compliance and records.

• The Court noted lack of reasoning in the officer’s decision.

• Interim stay was granted on the demand.

• Final decision is awaited, but taxpayer gets temporary relief.

Summary of Referred Cases

(No external judicial precedents were cited in the order; only statutory provisions and notifications were relied upon.)

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”