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: HIGH COURT OF MADHYA PRADESH AT INDORE

The writ petition stands dismissed by HIGH COURT OF MADHYA PRADESH AT INDORE in the case of M/S R.K. MODI AND SONS V. UNION OF INDIA through HON’BLE JUSTICE VIVEK RUSIA

The facts of the case are that 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. Admittedly, the aforesaid form was submitted beyond the time limit prescribed under Section 16(4) of the CGST Act. The Input Tax Credit, 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. 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.

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/-. It is further submitted that during the pendency of the writ petition, a show-cause notice dated 17.02.2022 has been issued to the petitioner by the Deputy Commissioner CGST & Central Excise, Ujjain. The petitioner, to the reasons best known to him, has not challenged the validity of the show-cause notice. Now the petitioner is required to approach the competent authority along with a reply to the show cause notice. It is further submitted that the petitioner is not challenging the constitutional validity of Section 16(4) of the CGST Act, therefore, the authorities are bound to act in accordance with law. Hence, no fault can be founded unless the provision is there in the statute. Admittedly, the petitioner has filed a return beyond the prescribed limit, therefore, the entries have been reversed under section 16(4) of the CGST Act. In the show-cause notice, the respondents have alleged that the notice i.e., petitioner has willfully filed the return on a later date than the due date of filing of GSTR 3B for the financial year 2018 – 19 to accommodate ITC, therefore, it is a matter of adjudication whether there was any willful delay on the part of the petitioner to submit the return or not? Now the show-cause notice has been issued, therefore, the petitioner is required to file a return to the show-cause notice before the competent authority. No case for interference is made out in the matter. In view of the above, the Writ Petition stands dismissed.
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