Facts of the Case

The petitioner, Madhab Patra, was issued a show-cause-cum-demand notice on 27.12.2023 alleging excess availment of ITC of Rs 2,48,92,900, against which an order-in-original dated 26.03.2024 disallowed ITC of Rs 2,46,92,900 and appropriated Rs 2,30,48,532 already paid. The petitioner's appeal, filed on 28.06.2024 under Section 107 of the CGST/WBGST Act, 2017, was pending when Section 128A — a scheme waiving interest and penalty on payment of tax for FY 2017-18 to 2019-20 — was notified on 01.11.2024, followed by a CBIC clarificatory circular dated 27.03.2025. The petitioner applied on 12.06.2025 before the proper officer, and separately notified the appellate authority on 31.03.2025, seeking the Section 128A waiver for FY 2018-19, having already discharged the tax for that year. Despite this, the appellate authority rejected the appeal on 23.06.2025 without considering the waiver application, and the proper officer separately rejected the waiver application citing non-filing of reply and non-submission of Form DRC-03A — even though a summary order later uploaded confirmed a reply had in fact been filed.

Issues Involved

  1. Whether the appellate authority's rejection of the appeal, without considering the taxpayer's pending Section 128A waiver application for FY 2018-19, can be sustained.
  2. Whether the proper officer's rejection of the waiver application, based on an incorrect record of non-filing of reply, is valid.

Petitioner's Arguments

  • The petitioner had notified the appellate authority as early as 31.03.2025 of his intent to avail Section 128A waiver for FY 2018-19, having already paid the tax for that year, but the appellate authority ignored this application entirely while rejecting the appeal.
  • The proper officer's order rejecting the waiver for non-submission of DRC-03A and non-filing of reply was factually incorrect, as the summary order uploaded later on the portal itself confirmed the reply had been filed on 20.06.2025.
  • Both orders were the product of non-application of mind and deserved to be set aside.

Respondent's Arguments

  • The CGST authorities submitted that the orders impugned were sustainable and should not be interfered with.

Court Order / Findings

  • The Court found the e-mail dated 31.03.2025, annexing the Board's circular and an electronic liability ledger as proof of tax payment, established that the petitioner had timely notified his intent to avail the Section 128A waiver.
  • The Court held it was wholly improper for the appellate authority to ignore this documented application and reject the appeal even for FY 2018-19, and equally held the proper officer's order was a product of total non-application of mind since it overlooked the petitioner's reply.
  • Both the appellate order dated 23.06.2025 (to the extent it concerned FY 2018-19) and the proper officer's order dated 21.07.2025 were set aside.
  • Both authorities were directed to reconsider the petitioner's respective applications and pass fresh orders within four weeks, without going into the merits of the underlying ITC dispute, which was left open.

Important Clarification

  • An appellate authority cannot reject a GST appeal without first considering a pending Section 128A waiver application communicated to it in advance, where the taxpayer has already discharged the relevant tax liability.
  • Discrepancies between a detailed order and a later summary order — uploaded by different officers holding the same post — on whether a reply was filed cannot be allowed to prejudice the taxpayer.
  • Section 128A relief operates period-wise; where a demand spans years partly covered and partly not covered by the scheme, the authority must separate and dispose of the covered portion per the CBIC's clarificatory circular.

Sections Involved

  • Section 128A, CGST/WBGST Act, 2017 – waiver of interest and penalty for FY 2017-18 to 2019-20 on payment of tax.
  • Section 107, CGST/WBGST Act, 2017 – appeal against orders of the adjudicating authority.
  • Form GST DRC-03A – adjustment of voluntary payment against a demand order.

Decision – In Favour of

The decision is in favour of the assessee, Madhab Patra — both the appellate and the proper officer's orders were set aside and remanded for fresh consideration of the Section 128A waiver claim.

Case Details

High Court at Calcutta – WPA 24840 of 2025 – Coram: Hon'ble Justice Om Narayan Rai – Order dated 15.12.2025.

Link to Download the Order

Click here to view/download the full order

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