2024 (2) TMI 182 - HC - GST

Violation of principles of natural justice - discrepancy between the amount specified in the show cause notice and the amount specified in the impugned order - transitional credit eligibility - Petitioner had obtained GST registrations in the names of its employees for the unlawful purpose of availing of ITC - Whether the petitioner has made out a case warranting interference in exercise of discretionary jurisdiction? Discrepancy between the amount specified in the show cause notice and the amount specified in the impugned order - HELD THAT - On examining the respective show cause notice in entirety, it appears that CGST liability has been indicated in course of setting out the basis of such show cause notice. For the purpose of these proceedings, it is neither necessary nor desirable to record conclusive findings. It is sufficient to record that it appears that there is some basis to say that a typographical error resulted in the respective show cause notices indicating the CGST liability as zero. Transitional credit eligibility - HELD THAT - In order to sustain a claim for transitional ITC, the assessee concerned should establish entitlement to such tax credit. If the assessing officer is of the view that further documents should be submitted for such purpose, it does not call for interference in exercise of discretionary jurisdiction. Petitioner had obtained GST registrations in the names of its employees for the unlawful purpose of availing of ITC - HELD THAT - The principles of natural justice cannot be put into a straight jacket. Learned counsel for the petitioner places reliance on the order issued in Thilagarathinam Match Works 2013 (11) TMI 535 - MADRAS HIGH COURT . The said order was in inquiry proceedings pursuant to a charge memo and cannot be compared to assessment proceedings. It should be borne in mind that the obligation of establishing eligibility for ITC is cast on the assessee concerned and, therefore, it is the responsibility of the assessee to place all the material documents to establish the actual purchase and receipt of goods or services. If the facts and circumstances of the case are considered cumulatively, none of the grounds of challenge constitute grounds for exercising discretionary jurisdiction. All these writ petitions are dismissed by leaving it open to the petitioner to impugn the orders impugned herein by way of statutory appeals.

Summary

Issues involved:
The judgment deals with challenges to separate assessment orders dated 06.10.2023 on three grounds: discrepancy in specified sums, transitional credit eligibility, and denial of documents and cross-examination rights.

Discrepancy in specified sums:
The petitioner contested that the sum specified in the show cause notice differed from the sum in the impugned order, particularly regarding CGST liability. The respondent argued that the show cause notice indicated the liability to pay CGST, despite a typographical error showing zero liability. The Court noted the discrepancy but did not reach conclusive findings, suggesting a typographical error.

Transitional credit eligibility:
The impugned orders required the taxpayer to provide additional documents to verify the claim for transitional Input Tax Credit (ITC). The petitioner asserted that all necessary documents were submitted and self-explanatory. The Court held that if the assessing officer deemed further documents necessary, it did not warrant interference in discretionary jurisdiction.

Denial of documents and cross-examination rights:
The petitioner argued that they were not provided with all relied-upon documents or allowed to cross-examine relevant parties. The respondent contended that ITC was unlawfully availed of, including through employees, based on intelligence reports. The Court emphasized the taxpayer's responsibility to establish eligibility for ITC and found no grounds for exercising discretionary jurisdiction based on the denial of documents and cross-examination rights.

Conclusion:
The Court dismissed all writ petitions, allowing the petitioner to challenge the orders through statutory appeals. It directed the appellate authority to consider the appeals independently of the judgment. No costs were awarded, and connected Miscellaneous Petitions were closed.