2024 (12) TMI 449 - HC - GST

Short payment of tax on outward supplies - excess availing of Input Tax Credit (ITC) - no specific details or evidence of discrepancies were provided to the petitioner - Violation of principles of natural justice - HELD HAT - Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court allows the writ petition as statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated, particularly in light of judicial precedents supporting such relief. This court finds the petitioner s case to be meritorious. Accordingly, the writ petition is allowed and the appellate order dated July 9, 2024 is quashed.

Summary

Issues:
1. Allegations of short payment of tax and excess availing of Input Tax Credit (ITC) by the petitioner.
2. Issuance of intimation and Show Cause Notice (SCN) by Respondent No. 1.
3. Passing of an adjudication order by Respondent No. 1, raising a demand against the petitioner.
4. Filing of an appeal by the petitioner under Section 107 of the GST Act and subsequent rejection by Respondent No. 2.
5. Interpretation of statutory provisions on limitation and consideration of procedural irregularities.

Analysis:
The petitioner, a Registered Taxable Person (RTP) under the Central Goods and Service Tax Act, faced allegations of short payment of tax and excess ITC availed, leading to the initiation of proceedings by Respondent No. 1. An intimation and a Show Cause Notice (SCN) were issued, followed by an adjudication order raising a substantial demand against the petitioner, including tax, interest, and penalty. However, the adjudication lacked specific details or evidence of discrepancies, violating principles of natural justice.

The petitioner, aggrieved by the adjudication order, filed an appeal under Section 107 of the GST Act, explaining the delay in filing due to the negligence of the former tax consultant and lack of prior knowledge about the proceedings. Despite this, Respondent No. 2 summarily dismissed the appeal citing the delay as the sole ground, leaving the petitioner dissatisfied with the arbitrary dismissal.

The High Court, after examining the presented documents and arguments, allowed the writ petition, emphasizing the need for a liberal interpretation of statutory provisions on limitation in cases of genuine hardships. Referring to a previous judgment, the Court highlighted that the provisions of the Act of 1963 were not expressly excluded by Section 107 of the Act of 2017, indicating that Section 5 of the Act of 1963 could be attracted in extending the period for filing an appeal.

Considering the procedural irregularities and arbitrary actions, the Court found merit in the petitioner's case, quashing the appellate order and directing the Appellate Authority to consider the application for condonation of delay on its merits. If the explanations provided for the delay were deemed sufficient, the Appellate Authority was instructed to condone the delay, hear, and dispose of the appeal on its merits. All pending applications were disposed of, with no order as to costs, and parties were directed to act on the server copy of the order downloaded from the official website of the Court.