The main legal point established in the judgment is the application of Section 16(4) of the CGST Act in the context of the petitioner's late filing of return and the reversal of Input Tax Credit (ITC).

JUDGMENT

Vivek Rusia, J. - The petitioner has filed the present writ petition under Article 226 of the Constitution of India being aggrieved by the reversal of Input Tax Credit (ITP) of Rs.39,93,286/- from DRC-03 dated 28.01.2020 (Annexure-P/1) followed by demand notice dated 18.06.2021 passed by respondents No.2 & 3.

2. The facts of the case in short are as under: -

2.1. The petitioner is a partnership firm engaged in the business of manufacturing wholesale beedi. The petitioner had declared the ITC pertaining to the financial year 2017 - 18 and 2018 - 2019 by filing Form GSTR 3B prescribed under Section 39 of Central Goods & Service Tax Act, 2017 (in short CGST Act). Admittedly, the aforesaid form was submitted beyond the time limit prescribed under Section 16(4) of the CGST Act. The Input Tax Credit (ITC), so availed was reversed on 28.01.2020 under protest. The petitioner submitted a representation on 19.02.2020 to the respondents by submitting that the aforesaid reversal was not voluntarily, but under protest.

2.2. According to the petitioner, the respondents did not pass any speaking order and served an impugned demand notice dated 18.06.2021. According to the petitioner, it was a genuine hardship and beyond the reasonable control of the petitioner for filing the GSTR 3B relating to the financial year 2018 - 19 within time. However, returns were filed on 06.01.2020 with an applicable late fee, therefore, the rigor of Section 16(4) would not apply in the case of the petitioner.

3. Learned counsel appearing on behalf of the petitioner submits that once the petitioner has filed the return after payment of applicable late fee under Sections 47 & 50 of the CGST Act which in fact allows the taxpayer to file the return beyond the due date then such a return should have been accepted without applying the provision of Section 16(4) of the CGST Act. However, learned counsel fairly admits that the petitioner is not challenging the constitutional validity of Section 16(4) of the CGST Act in this petition, but some other assessees have challenged the constitutional validity of the aforesaid provision. It is further submitted that the provision of Section 16(4) is procedural in nature, and respondents should not take away the right of filing of return with a late fee. There should be a scope of application of mind and consideration of non-filing of return within time while applying Section 16(4) of the CGST Act. The provision of Section 16(4) should not defeat a substantial claim of ITC which is otherwise allowable under the provisions CGST Act.

4. It is further submitted that the petitioner should not be relegated to the adjudicating authority as well as the appellate authority as admittedly the petitioner has availed the Input Credit, but there was a delay in submission of the return. Hence, a writ of mandamus be issued to the respondents directing them to permit the petitioner to submit the return with a late fee and grant the refund of Rs.39,93,286/-. In support of the aforesaid contention, learned counsel for the petitioner placed reliance upon a judgment delivered by the Division Bench of this Court in the case of M/s Bharat Heavy Electricals Limited v/s CEC, Bhopal (MP) reported in 2015 SCC OnLine MP 5687, wherein the Division Bench of this Court has considered the provisions of Rule 57G(1) of the Central Excise Rules. The Division Bench has found that entries made in the documents are maintained under RG - 23 A Part - I & Part - II. Even though in Part - I the entry is made showing the date of taking availment of MODVAT credit within the stipulated period of six months, but Part - II, as the date was beyond six months, the facility of MODVAT cannot be extended as assessees have not shown availing the benefit in accordance with the requirement of the Rules. The Division Bench has further held that when the assessee was entitled to avail the MODVAT credit under Rule 57A merely because of the time fixed in making the entry in Part - II