2022 (6) TMI 763 - HC - GST

Violation of principles of natural justice - input tax credit - petitioner submits that Annexure P/1 is conspicuously silent as regards the description of transaction on which the petitioner alleged to have availed the ITC - HELD THAT - The petitioner was issued a notice dated 11.03.2019 with reference No.83/2019/41-B/21/TRAW-3/152. This notice finds mention in Annexure P/1, which is a notice under Rule 142(1) of the GST Rules. It is also important to note that the petitioner did not file any reply to Annexure P/1, dated 13.032019. If, the contents of paragraph-6 of the petition are taken into consideration, the same would reveal that the petitioner did not file any reply, but has made an attempt to demonstrate that he sought documents from the respondent No.2 to have some clarity on the issue, but those documents were not supplied to the petitioner and hence for want of those documents, the petitioner could not file reply. The explanation so put forth by the petitioner has no substance inasmuch as, neither there is any reply nor there is any application filed by the petitioner on the record by which he sought documents as well as detail of the transaction from the respondents. Whether the petitioner was aware about the transactions which were taken note of by the respondent to issue a notice under Section 74 of the Act of 2017? - HELD THAT - If the entire, appeal is perused the same would reveal that the petitioner having already submitted its reply dated 08.05.2019 (Annexure R/2) disclosing the transactions with M/s V.K. Enterprises, Chhatarpur, failed to mention the facts as regards transactions with M/s V.K. Enterprises, Chhatarpur in his memorandum of appeal. Thus, apparently, the petitioner has made futile attempt to lay foundation by raising a ground that in the notice contained in Annexure P/1, he was not informed regarding the transactions, which in the eyes of the respondents were questionable or doubtful - the writ petition filed by the petitioner is grossly misconceived. The grounds raised in the entire petition are ill founded. Petition dismissed.

Summary

Issues Involved:
Violation of principles of natural justice in issuance of notice, Lack of disclosure of transactions in notice, Allegations of being kept in the dark, Knowledge of transactions by the petitioner, Failure to disclose relevant facts in the appeal.

Analysis:
The petitioner, engaged in the business of Ferrous waste and scrap, filed a petition seeking to set aside orders imposing tax liability and penalty under the Goods and Services Tax Act, 2017. The petitioner alleged a violation of natural justice, contending that the notice did not disclose the transactions on which Input Tax Credit (ITC) was availed. The petitioner argued that crucial details were missing in the notice and subsequent orders, leading to a lack of opportunity to defend against the allegations. The petitioner claimed to have been unaware of the specific transactions until the appellate order revealed them, highlighting a lack of transparency in the proceedings.

The respondents, on the other hand, asserted that the petitioner had availed ITC in transactions with a specific entity, M/s V.K. Enterprises, Chhatarpur, as evidenced in a notice dated 11.03.2019. They argued that the petitioner was well-informed about the details of the transactions, as indicated in the communication and the petitioner's reply contained in Annexure R/2. The respondents contended that the petitioner's awareness of the transactions negated the claim of being kept in the dark, emphasizing that the petitioner had an opportunity to respond and provide relevant documents regarding the transactions in question.

Upon examination of the facts and submissions, the court found that the petitioner had received a notice specifying the transactions under scrutiny and had submitted a reply acknowledging the dealings with M/s V.K. Enterprises, Chhatarpur. The court noted that the petitioner's failure to disclose these facts in the appeal undermined the claim of lack of awareness or opportunity to present a defense. Consequently, the court deemed the petitioner's arguments as misconceived and ill-founded. The court dismissed the writ petition, emphasizing that the petitioner was aware of the transactions in question and imposed costs in favor of MPSLSA due within a specified timeframe, failing which execution proceedings would ensue.