Suncraft Energy Private Limited And Another Vs Assistant Commissioner, State Tax

Case Number: MAT 1218 OF 2023

Date of Judgement: 02/08/2023

In a significant ruling, the Calcutta High Court recently handed down a favorable decision in the case of Suncraft Energy Private Limited versus the Assistant Commissioner, State Tax. The case revolved around the appellant’s claim for input tax credit (ITC) under the WBGST Act for the financial year 2017-18. The appellant faced challenges with some supplier invoices not reflecting in their GSTR 2A. Let’s delve into the facts and the court’s decision that brought clarity to the interpretation of the law in relation to ITC eligibility.

Facts of the Case:
Suncraft Energy Private Limited, a registered dealer, sought to claim input tax credit under the West Bengal Goods and Services Tax (WBGST) Act for the financial year 2017-18. However, certain invoices from their supplier were not showing up in the appellant’s GSTR 2A, creating discrepancies in the claim.

The Assistant Commissioner, without conducting a thorough investigation into the supplier’s end, issued notices for the recovery of the input tax credit. Challenging this order, Suncraft Energy asserted that they had fulfilled all the necessary conditions to be eligible for the ITC benefit.

Key Decision Points:
The Calcutta High Court analyzed the case and made the following significant decisions:

  1. Fulfillment of ITC Eligibility Conditions:
    The court examined Section 16(2) of the WBGST Act and concluded that Suncraft Energy had indeed met all the eligibility conditions required to claim the input tax credit.
  2. Role of Form GSTR-2A:
    Referring to the Bharti Airtel Ltd. case, the court clarified the purpose of Form GSTR-2A, emphasizing that it serves as a facilitator for self-assessment. It cannot be the sole determinant of the eligibility for input tax credit.
  3. Directing Action Against the Supplier:
    The court emphasized the need for a fair and balanced approach in such cases. It set aside the recovery order against Suncraft Energy and directed the tax authorities to take appropriate action against the supplier before proceeding against the appellant, except under exceptional circumstances.

The Calcutta High Court’s decision in the case of Suncraft Energy Private Limited and the Assistant Commissioner, State Tax, has provided much-needed clarity on the interpretation of the law concerning input tax credit under the WBGST Act. The ruling reinforces the importance of thoroughly assessing the fulfillment of ITC conditions by the taxpayer rather than solely relying on Form GSTR-2A. Furthermore, it highlights the significance of conducting a fair investigation into the supplier’s side before proceeding with recovery actions against the recipient. This judgment sets a precedent for future cases involving ITC claims and ensures a just and equitable approach in resolving GST-related matters.

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