2024 (6) TMI 665 - HC - GST

Excess Input Tax Credit (ITC) - non-reversal of ITC with credit notes - Challenge to tax proposals for 2019-2022 assessment periods - HELD THAT - The impugned order clearly indicate the complete failure of the respondent to engage with the submissions of the petitioner and record reasons in rejecting such submissions. Since findings were recorded without indicating any reasons for such findings, these orders cannot be sustained. These matters are remanded for reconsideration. The petitioner is permitted to submit additional documents, if any, within 15 days from the date of receipt of a copy of this order - Petition disposed off by way of remand.

Summary

Issues: Assessment orders for multiple periods challenged; petitioner's explanations not considered satisfactorily; failure to engage with petitioner's submissions; lack of reasons for findings in impugned orders.

Analysis:
The judgment pertains to three writ petitions challenging assessment orders for the periods 2019-2020, 2020-2021, and 2021-2022. The petitioner responded to show cause notices dated 09.12.2023 by explaining various tax proposals. The petitioner contended that excess Input Tax Credit (ITC) was not availed, and the available ITC balance was higher than utilized. Additionally, the petitioner argued that credit notes were considered, selling and distribution expenses were not taxable under GST laws, and items subject to GST under reverse charge mechanism were actually under forward charge mechanism. However, the respondent did not accept the explanations provided by the petitioner and issued impugned orders without referencing the petitioner's reply in detail.

The learned counsel for the petitioner highlighted the discrepancies in the respondent's orders, emphasizing that the respondent did not consider the petitioner's detailed explanations adequately. On the other hand, the Government Advocate for the respondent pointed out that supporting documents were allegedly not received from the petitioner, which the petitioner disputed. The court observed that the respondent's orders lacked engagement with the petitioner's submissions and failed to provide reasons for rejecting them, rendering the orders unsustainable.

Upon reviewing the petitioner's replies and the impugned orders, the court found a lack of proper engagement by the respondent with the petitioner's contentions. The court noted that the respondent's findings were not adequately reasoned, leading to the decision to set aside the impugned orders and remand the matters for reconsideration. The petitioner was granted 15 days to submit additional documents, and the respondent was directed to provide a reasonable opportunity for a fresh assessment within three months. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.