IMPORTANT POINT
The denial of Input Tax Credit requires verification of the supplier's tax payment, and unilateral action against the recipient without such verification is arbitrary.

JUDGMENT :

(T.S. Sivagnanam, CJ.) :

1. The appeal and the writ petition were heard analogously and are disposed of by this common judgment and order.

2. We have heard Mr. Arnab Chakraborty and Mr. Aniket Chaudhury, learned Advocates appearing for the appellant/ petitioner, Mr. T.M. Siddique, learned A.G.P. assisted by Mr. Tanoy Chakraborty and Mr. Saptak Sanyal, learned Advocates appearing for the State in MAT 2459 of 2023 and Mr. Uday Shankar Bhattacharya and Mr. Tapan Bhanja, learned Advocates appearing for the CGST Authority.

3. MAT No. 2459 of 2023 has been filed challenging the order dated 04.12.2023 in WPA 2544 of 2023. In the said writ petition the appellant had challenged a show-cause notice dated 22nd August, 2023 issued by the WBGST Authorities on the ground that the notice has been issued without causing any verification from the supplier’s end and denying credit to the appellant. The learned Writ Court disposed of the writ petition by directing the appellant to file the objection to the show-cause notice and the authority was directed to consider the same and take note of the judgment relied on by the appellant. The Court also directed that till the disposal of the objection no coercive action shall be taken against the appellant. It is contended before us by the learned Advocate for the appellant that in the writ petition the appellant had contended that the show-cause notice is without jurisdiction, more particularly in the light of the decision of this Court in Suncraft Energy Private Limited Versus Assistant Commissioner of State Tax, (2023) 9 Centax 48 (Cal). During the pendency of the appeal the respondent authority had adjudicated the show-cause notice and passed an order dated 28.12.2023 which was challenged in the writ petition in WPA 5222 of 2024 which has been tagged to be heard along with the appeal.

4. The respondent authority issued notice under Section 73 (1) of the CGST Act, 2017/ WBGST Act, 2017 dated 22.8.2023 holding that the appellant had failed to produce any evidence from which it can be ascertained that the suppliers had paid tax to Government on those supplies (which are disclosed/ admitted by the suppliers in their statement in GSTR-I) and that the appellant had availed and utilized Input Tax Credit (IPC) in contravention of Section 16 (2)(c) of the Act. Therefore, it was proposed that ITC of Rs. 4,52,739.42/-(IGST) is found reversible along with interest, payable as per provisions of Section 50 of the GST Acts. Challenging the said show-cause notice the writ petition had been filed as stated above, which has been disposed of by the impugned order.

5. The adjudicating authority in the order dated 28.12.2023 has confirmed the demand made in the show-cause notice. We find from the said order certain findings recorded by the authority are outside the scope of the allegations in this show-cause notice. These findings are in page 6 of the adjudication order dated 28.12.2023 which pertained to the allegation that the appellant who claimed to have received manpower services only did not conclusively prove whether he actually availed the services or not and that the appellant had not produce documents like the register of workers, the name of workers against whom the invoices were raised etc. from where it may be concluded that the actual service has been procured by the RPP for furtherance of his business. As a rightly pointed out by the learned Advocate for the appellant these were never part of the allegation in the show-cause notice. The adjudicating authority has admitted that the appellant has produced two certificates issued by the Chartered Accountants declaring that the suppliers had discharged the liability in corresponding GSTR-3B for the relevant periods. The adjudicating authority proceeded to reject those certificates issued by the Chartered Accountants by observing that they do not match with the facts stated in the returns as available in GST common portal. If there was any clarificat