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Case Summary: M/s. Greenstar Fertilizers Limited Vs. The
Joint Commissioner (Appeals), Office of the Commissioner of GST and Central
Excise (Appeal)
W.P. No.: 26254 of 2022
Court: Madurai Bench of Madras High
Court
Date: 11.06.2024
Facts of
the Case:
The
petitioner, M/s. Greenstar Fertilizers Limited, challenged the order passed by
the first respondent (The Joint Commissioner) in A.No.21/2022-GST, dated
17.08.2022. This order was regarding the rejection of an appeal filed by the
petitioner against the second respondent's Order-in-Original No.02/2021-GST
dated 31.12.2021, which imposed penalties under Section 74(1) and 74(5) of the
CGST Act, 2017.
Submission
by Petitioner:
The
petitioner argued that the show cause notice issued by the second respondent
was vague and did not disclose any foundational allegation of fraud or wilful
misstatement necessary for imposing a penalty under Section 74 of the CGST Act.
They contended that merely reflecting transitional credit in the electronic
credit ledger without utilizing it should not be treated as
"availment" leading to penalty imposition.
Submission
by Respondent:
The
respondents argued that the impugned order was in accordance with the CGST Act
provisions. They stated that the petitioner admitted to wrongly transitioning
credit under Section 142 of the CGST Act, leading to the issuance of the show
cause notice and subsequent penalty. The respondents further contended that
under Section 74 of the CGST Act, penalties apply irrespective of whether the
credit was utilized or merely availed.
Findings of
the Court:
The court
found that the imposition of a significant penalty under the given
circumstances was unjustified. However, acknowledging that the petitioner
availed input tax credit which could have led to its wrong utilization, the
court decided to impose a token penalty instead.
Judgment:
The writ
petition was allowed with the imposition of a token penalty of Rs. 10,000 on
the petitioner. The court set aside the impugned order in part, specifically
concerning the heavy penalty while maintaining a token penalty due to the
peculiar facts and circumstances of the case. No costs were awarded, and
connected miscellaneous petitions were closed.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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