No interest or penalty is leviable on wrong availment of ITC which was never utilised


No interest or penalty is leviable on wrong availment of ITC which was never utilised

The Punjab and Haryana High Court, in the matter of M/s. Deepak Sales Corporation v. Union of India [CWP No. 283 of 2023 dated September 21, 2023], has passed a writ petition appeal. The court ruled that the demand for interest and fine cannot be sustained if the inaccurately claimed credit is reversed and the assessee did not use it.

Key Facts of the Case:

The petitioner in the instant case had wrongly punched the figure of ITC availment while filing monthly return for the month of August 2017, which in turn resulted into excess availment of ITC.

Consequently, the Petitioner claimed an excess ITC of Rs.12,65,20,827/-. Upon realizing the error, the Petitioner contacted the Revenue Department, the respondent in this case, via email to seek guidance on reversing the ITC. However, as no response was received from the Respondent, the Petitioner could not reverse the excess ITC while submitting the return for July 2018. Eventually, the Petitioner rectified the error and reversed the excess ITC.

Dissatisfied with the contested Order, the Petitioner filed a writ petition before the Hon’ble Punjab and Haryana High Court. The Petitioner challenged the disputed Order, and SCN because the Proper Officer did not issue the notice. Additionally, the Petitioner argued that the excess ITC was not utilized, and the Respondent did not respond to the Petitioner’s query regarding the reversal of the Input tax credit under GST. Therefore, the Petitioner should not be liable to pay any interest or charges.

The petitioner demonstrated before the high court that there was no utilisation of excess availed ITC and such ITC was reversed much before GST audit by department. Therefore, no melafide intention can be established in the instant case.

Reference-Deepak Sales Corporation Vs. Union of India and Others


The copy of the order is as under:


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Krishnakant Jakhotia

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