The Calcutta High Court has overturned both the GST appellate order and the original adjudication order under the GST Act. The court determined that the authorities did not adequately review the return data available on the portal, which they deemed a significant failure to discharge their responsibilities.
Justice Om Narayan Rai said that although the grounds raised by the applicant for reversal figures were extracted in the appellate order, no discussion or reasoning was provided on those figures.
The case that emerged is that an SCN issued u/s 73 of the GST Act to Shine Pharmaceuticals Ltd. It was alleged in the Show cause notice that there was an excess claim of the ITC, a reversible ITC, and a short payment of tax on outward supplies.
Since no response was submitted by the applicant to the SCN, the proper officer passed an adjudication order on 16 January 2024 confirming tax liability on all three counts.
On appeal, the order was modified by the appellate authority by providing partial relief on specific problems, but was denied to interfere with the finding of the reversal of ITC. The same appellate order on 28 March 2025 was contested before the High Court.
Before the Court, the applicant presented detailed figures from statutory returns, demonstrating that the Input Tax Credit (ITC) liable for reversal due to credit notes and discrepancies in the place of supply totalled approximately Rs 1.74 crore. However, the actual ITC reversed, as mentioned in GSTR-3B and GSTR-9, was higher than required.
Adv. Sandip Choraria, the applicant’s counsel, pointed to data from the portal, stating that excess ITC had indeed been reversed, and thus, no further reversal demand should stand. He argued that these figures were accessible on the GST portal and should have been verified by the authorities.
In response, the State claimed that these detailed facts were not adequately presented to the Appellate Authority. They argued that the adjudication had proceeded ex parte due to the lack of a response to the SCN.
As the related numbers were already available in statutory returns on the GST portal along with the GSTR-1, GSTR-3B, and GSTR-9, the Appellate Authority must consider them while deciding the appeal, the court stated.
The court mentioned that the non-consideration of readily available statutory data consists of a clear abdication of duty by the appellate authority. The appellate order on the same foundation was discovered to be unsustainable and was obligated to be quashed.
Also, the Court observed that even the original adjudicating authority had failed to analyse the GSTR-3B and GSTR-9 records that were available to it during passing the order.
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Thus, the appellate order and the original adjudication order were set aside along with the recovery proceedings.
| Case Title | Shine Pharmaceuticals Ltd. vs Joint Commissioner of Revenue |
| Case No. | WPA 9722 of 2025 |
| For Petitioner | Mr Sandip Choraria, Mr Rishav Manna, and Mr Akash Chakraborty |
| For Respondent | Mr Tanoy Chakraborty, Mr Saptak Sanyal |
| Delhi High Court | Read Order |