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2024 (6) TMI 1381 - HC - GSTIssues: Challenge to an order regarding reversal of Input Tax Credit for credit notes issued by the supplier. Analysis: The petitioner challenged an order in original dated 12.03.2024 specifically concerning defect no.3, which involved the reversal of Input Tax Credit for credit notes issued by the supplier. The petitioner received a show cause notice regarding six defects and responded to it on 22.01.2024 and 14.02.2024. The petitioner argued that the credit notes issued by the supplier were financial credit notes and, therefore, the recipient was not liable to reverse Input Tax Credit. The petitioner contended that the discount offered by the supplier was mistakenly considered a service provided by the purchaser to the supplier in the impugned order. Analysis Continued: The Additional Government Pleader pointed out that the petitioner had appealed other defects before the appellate authority and argued against encouraging such practices. The court referred to sub-section (3) of Section 15 of applicable GST statutes, which allows a reduction in the value of supply for discounts duly recorded in invoices or established in agreements. The court found that the requirements under sub-section (3) were not satisfied in this case, making the supplier liable to pay tax on the full value of supply. The impugned order concluded that the taxable person was providing a service to the supplier by facilitating an increase in the volume of sales, which the court deemed erroneous and contrary to GST law. Analysis Continued: The court considered the discretionary nature of jurisdiction under Article 226 and the availability of alternative remedies. Despite the petitioner approaching the appellate authority for other issues requiring evidence reappraisal, the court chose to exercise jurisdiction due to the pure legal nature of the issue at hand. The court set aside the impugned order only in relation to defect no.3 and remanded it for reconsideration by the original authority. The assessing officer was directed to issue a fresh order within three months, providing the petitioner with a reasonable opportunity, including a personal hearing. This judgment highlights the importance of correctly interpreting GST laws, especially concerning Input Tax Credit and discounts. It also emphasizes the court's discretion in entertaining writ petitions despite the availability of alternative remedies, particularly in cases involving pure legal issues.
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