Facts of the Case

M/s. Bappa Enterprise filed a writ petition (WPA 23566 of 2023) before the High Court at Calcutta against the Deputy Commissioner of State Tax, Barasat Charge, and other officials, challenging an appellate order dated 21st July 2023 passed by the appellate authority under the relevant provisions of the West Bengal Goods and Services Tax Act, 2017 (WBGST Act). The petitioner's central grievance was that the appellate order had been passed without considering CBIC Circular No.193/05/2023-GST dated 17th July 2023, issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, which directly bore on the input tax credit issue raised in the appeal and had been placed on record as Annexure P-5 to the writ petition. Since the circular was issued only four days before the appellate order, its non-consideration formed the sole legal ground urged before the writ court.

Issues Involved

  1. Whether an appellate order passed under the WBGST Act, without considering a binding CBIC circular on input tax credit that was already in force and specifically placed on record before the authority, is sustainable in law.
  2. Whether the matter should be remanded for a fresh decision by the appellate authority after taking the circular into account, with an opportunity of hearing.

Petitioner's Arguments

  • The impugned appellate order dated 21st July 2023 was passed without considering CBIC Circular No.193/05/2023-GST dated 17th July 2023, a circular directly bearing on the input tax credit issue in dispute, rendering the order legally unsustainable and liable to be set aside.
  • Since the circular clarified the very point at issue in the appeal, its omission from the appellate authority's reasoning amounted to a failure to apply the applicable law correctly, warranting interference by the writ court and a remand for fresh consideration.

Respondent's Arguments

  • The learned Additional Government Pleader appearing for the State could not dispute the petitioner's specific allegation that the appellate authority had passed the impugned order without taking the said circular into consideration, effectively conceding the factual basis of the challenge.

Court Order/Findings

  • Since the State's own counsel could not dispute that the appellate order had been passed without considering the binding CBIC circular dated 17th July 2023, which was directly applicable to the dispute, the impugned order could not be sustained and called for interference.
  • The writ petition was disposed of by setting aside the impugned appellate order dated 21st July 2023; the matter was remanded to the appellate authority concerned to pass a fresh order after considering the circular and affording the petitioner or its authorised representatives an opportunity of hearing, within a period of four weeks from communication of the order.

Important Clarification

An appellate order under the GST law passed without taking into account a relevant and applicable CBIC circular that was placed before the authority is liable to be set aside and remanded. Departmental appellate authorities are bound to consider binding CBIC circulars, including those clarifying input tax credit issues, while adjudicating GST disputes, and an unrebutted allegation of such an omission is often sufficient, without more, for a writ court to remand the matter for fresh consideration.

Sections Involved

  • Appellate provisions of the WBGST Act, 2017 — governing the appellate authority's order under challenge, requiring due consideration of applicable law and departmental clarifications while deciding an appeal.
  • CBIC Circular No.193/05/2023-GST dated 17.07.2023 — clarification on input tax credit issues issued by the GST Policy Wing, which the appellate authority failed to consider.

Decision – In Favour of

The decision is in favour of the Assessee. The appellate order was set aside for failing to consider the applicable CBIC circular on input tax credit, and the matter was remanded for fresh consideration in light of that circular, after affording the petitioner a hearing, though the final merits of the ITC dispute remain to be decided afresh.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court at Calcutta
  • Case No.: WPA 23566 of 2023
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice Md. Nizamuddin
  • Decision Date: 16 November 2023
  • Disposal Nature: Disposed of; appellate order set aside and remanded

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