2024 (5) TMI 182 - HC - GST

Failure to reply to SCN - alleged non reversal of Input Tax Credit (ITC) in respect of credit notes issued by the supplier - case of petitioner is that reply in Form ASMT 11 should have been taken into account - HELD THAT - On perusal of the impugned order, it is noticeable that the notice in Form ASMT 10 is recorded therein. However, the reply of the petitioner thereto was not taken into account. Consequently, as is evident from paragraph 12 of the impugned order, the tax proposal was confirmed on the ground that the petitioner did not respond to the notices or attend personal hearing. Since the petitioner's reply to the notice in Form ASMT 10 was not taken into consideration in the impugned order, such order is unsustainable. The impugned order dated 20.11.2023 is set aside and the matter is remanded for reconsideration. The petitioner is permitted to submit a reply to the show cause notice within 15 days from the date of receipt of a copy of this order. Petition disposed off by way of remand.

Summary

Issues involved: Challenge to an order in original dated 20.11.2023 regarding alleged non-reversal of Input Tax Credit (ITC) and failure to respond to show cause notice.

Summary:

Issue 1: Alleged non-reversal of Input Tax Credit (ITC)
The petitioner received a notice in Form GST ASMT 10 on 20.04.2023 regarding the alleged non-reversal of ITC in respect of credit notes issued by the supplier. The petitioner replied on 25.05.2023, stating that they were not made aware of a subsequent notice and thus could not respond to the show cause notice or participate in the proceedings. The impugned order was issued based on these circumstances.

Issue 2: Failure to respond to show cause notice
The petitioner's counsel argued that the tax proposal concerning the alleged non-reversal of ITC was based on the net value of ITC, after deducting the value of credit notes, which was reflected in the annual return filed by the petitioner. Although the petitioner did not respond to the show cause notice, it was contended that the reply in Form ASMT 11 should have been considered.

Court Decision:
Upon scrutiny, it was found that the petitioner's reply to the notice in Form ASMT 10 was not taken into account in the impugned order. Consequently, the order was deemed unsustainable as it did not consider crucial information provided by the petitioner. The High Court set aside the order dated 20.11.2023 and remanded the matter for reconsideration. The petitioner was granted 15 days to submit a reply to the show cause notice, and the respondent was directed to provide a reasonable opportunity for a personal hearing before issuing a fresh order within three months.

The writ petition was disposed of without any order as to costs, and connected miscellaneous petitions were closed.