Brief summary of the case
Court: Calcutta High Court
Number: M.A.T. 2411 of 2023
Petitioner: M/s Cosyn Limited
Respondent: Assistant Commissioner of State Tax
Date of decision: 30.04.2024
Judges: Honourable Chief Justice T.s. Sivagnanam And Hon’ble Mr. Justice Hiranmay Bhattacharyya
The case of M/S Cosyn Limited vs. Assistant Commissioner of State Tax was adjudicated by the High Court of Judicature at Calcutta, with the judgment delivered on April 30, 2024, by Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya.
Case Background and Key Points:
Issue and Appeal: The appellant challenged an assessment order passed under the W.B.G.S.T. Act. The initial writ petition was dismissed on the grounds that the assessment order was appealable. However, the court stayed the assessment order on December 22, 2023, subject to the appellant depositing 10% of the disputed tax.
Appellant’s Contention: M/S Cosyn Limited argued that the input tax credit (ITC) of IGST was used for the payment of CGST and SGST as per Section 18(a) and (c) read with Rule 4 of the Goods and Services Tax Settlement of Fund Rules, 2017. They contended that the ITC utilized for SGST was appropriated to the respective State, meaning tax had effectively flowed to the State of West Bengal.
State’s Response: The State of West Bengal’s affidavit did not specifically address the appellant’s contention about the flow of tax to the State. The court directed the State to provide written instructions regarding the appellant’s claim.
Verification by the State: The Deputy Commissioner, Revenue, Bowbazar Charge, confirmed that the ITC utilized for payment of SGST amounting to Rs. 63,71,353 had been transferred to the Government of West Bengal.
Court’s Decision:
The court concluded that the assessment order could not survive since the claimed ITC had been appropriated correctly.
The appeal was allowed, and the impugned assessment order dated August 21, 2023, was set aside.
The court directed the refund of the 10% pre-deposit made by the appellant within eight weeks from the date of receipt of the court’s order.
This judgment clarifies that if the ITC of IGST is appropriately utilized and transferred to the State, there is no need for its reversal, thereby reinforcing the proper application of tax credit rules under GST law