2024 (4) TMI 515 - HC - GST

Carry forward of excess payment of tax as ITC for next year - Allegation of availment of excess input tax credit - Violation of principles of natural justice - personal opportunity of hearing not granted - cryptic non-speaking order - HELD THAT - The net tax payable on the previous year has been shown both for the State GST as well as Central GST in minus, that means, if it is zero balance nothing to be returned, if it is in minus, the tax excessively paid previously has to be returned back, therefore, the said excess payment of more than Rs. 1,36,563/- have been made as a carry forward by way of ITC in the next year starting from 1st July, 2017, therefore, such a claim made by the dealer has to be considered as to whether the previous year excess tax had been by her, for which, she is entitled to get for such a credit, without going into that aspect, since the revenue has passed a cryptic order making such a demand from the dealer when it was challenged before this Court, the learned Judge also has accepted the said version of the revenue side, which in our considered view, may be erroneous. Thus, it is held that the order impugned passed by the learned Judge is liable to be interfered with - the impugned order is set aside - matter is remitted back to the respondent revenue for reconsideration, where an opportunity of being heard to be given to the appellant dealer and who can putforth her case, based on which a final decision can be taken by the revenue - appeal allowed by way of remand.

Summary

Issues:
The issues involved in this case are related to the incorrect demand made by the revenue department u/s TNGST Act, 2017, against the appellant for a wrongly carried forward credit amount, without providing a personal opportunity of hearing.

Judgment Details:

Issue 1: Incorrect demand by the revenue department
The appellant, a dealer in cardamom and pepper registered under the TNGST Act, received a notice to show cause and pay a wrongly carried forward credit amount. The revenue passed a non-speaking order without a personal hearing, leading to the Writ Petition. The learned Judge dismissed the petition based on the finding that the credit limit claimed by the appellant was incorrect due to zero balance in the excess input tax credit for a specific period. The appellant's counsel argued that the negative balance in the return indicated an excess tax payment that should be returned or carried forward as input tax credit (ITC) for the next year. The revenue authorities demanded the amount based on a different column without considering the self-assessment and adjustment possibilities. The Court held that the order was erroneous as the appellant was entitled to claim the excess tax paid, and the matter was remitted back to the revenue for reconsideration after providing a hearing to the appellant.

Conclusion:
The Writ Appeal set aside the impugned order and remitted the matter back to the revenue for reconsideration after giving the appellant an opportunity to present her case. The Court found the revenue's demand to be based on an incorrect interpretation of the tax payment details and directed a fresh decision based on proper consideration.