2024 (8) TMI 1454 - HC - GST

Challenge to impugned order and the impugned recovery notice passed by the respondent - petitioner submitted that the entire tax liability has been paid by the petitioner by reversal of wrongly availed ITC, and hence, the petitioner is not liable to pay any amount - principles of natural justice - HELD THAT - It is not disputed that the petitioner has already paid the entire tax demand, and is only seeking an opportunity to file the reply to the show cause notice and personal hearing with respect to imposition of interest and the penalty, which the petitioner claims that they are not liable to pay. Even otherwise, as per the decision taken in the 53rd GST Council Meeting, the time is extended upto 31st March 2025. By applying the proposed amendment to Section 128(A) of the Act, the petitioner is not liable to pay any amount, since the enough amount is available in the ITC. The order impugned herein is set aside and the matter is remanded to the respondent in respect of the assessment years 2017-2018 for fresh consideration. In view of the setting aside of the order dated 19.07.2021, the consequential final notice dated 05.05.2023 is also set-aside - Petition disposed off by way of remand.

Summary

Issues:
1. Challenge to impugned order and recovery notice for assessment year 2017-2018.
2. Lack of opportunity for personal hearing and filing a reply to show cause notice.
3. Dispute regarding imposition of penalty and interest.
4. Payment of tax liability through reversal of Input Tax Credit (ITC).
5. Request for setting aside the impugned order and recovery notice.
6. Direction for fresh consideration by the respondent.
7. Requirement for filing a reply/objection and documents within a specified period.
8. Issuance of a clear notice for personal hearing by the respondent.
9. Order to lift the attachment of petitioner's bank account due to proposed amendment and availability of ITC.
10. Disposal of the writ petitions without costs.

Analysis:
The High Court of Madras heard two Writ Petitions challenging the impugned order and recovery notice issued by the respondent for the assessment year 2017-2018. The petitioner, represented by Ms. Aparna Nandakumar, contended that the tax amount had been paid subsequent to the order but claimed no notice for personal hearing was received. The respondent, represented by Ms. Amirtha Poonkodi Dinakaran, acknowledged the tax payment but highlighted the dispute over penalty and interest. The petitioner argued that the tax liability was discharged by reversing wrongly availed ITC, while the respondent contended that tax liability was not paid but only ITC was reversed.

The Court noted that the petitioner sought an opportunity to respond to the show cause notice and contest the imposition of interest and penalty. Considering the decision of the 53rd GST Council Meeting to extend the time limit for tax payment, the Court set aside the impugned order and directed a fresh consideration by the respondent for the assessment year 2017-2018. The Court ordered the petitioner to file a reply/objection within four weeks and directed the respondent to provide a clear notice for a personal hearing.

Furthermore, the Court emphasized that due to the proposed amendment extending the time limit and the availability of sufficient ITC, the attachment of the petitioner's bank account was to be lifted immediately upon production of the Court's order. The Court disposed of the writ petitions without costs, providing relief to the petitioner and closing the connected Miscellaneous Petitions.