2024 (7) TMI 609 - HC - GST

Violation of principles of natural justice - order challenged on the ground that the petitioner's reply was not taken into consideration - unlawful availment of Input Tax Credit (ITC) - payment of professional charges on reverse charge mechanism basis - HELD THAT - It is found that the reply and documents annexed thereto were not taken into consideration. As regards professional charges, the petitioner had stated that reverse charge mechanism liability was limited to Rs. 4,18,000/- and that this amount was paid. This reply was also completely disregarded in the impugned order. Consequently, the impugned order cannot be sustained and the matter requires reconsideration. The impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration. The petitioner is permitted to submit additional documents, if any, within a period of two weeks 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 on the ground of petitioner's reply not considered.

Analysis:
The petitioner received a show cause notice regarding circular trading and payment of professional charges. The petitioner replied, asserting no common management with another entity and provided relevant documents. However, the impugned order confirmed tax proposals without considering the petitioner's reply or the enclosed documents. The petitioner's contention was that the tax proposal was confirmed solely based on the entities sharing a common place of business and not considering the reply. Similarly, regarding professional charges, the reply was disregarded, and the total tax proposal value was confirmed. The Government Advocate argued that the petitioner's reply was considered, and there was no case for interference, suggesting the petitioner had an alternative statutory remedy.

Upon review, the court found that the petitioner's reply and documents were not considered in the impugned order for both defects. The reply clearly stated the absence of common management and specified the liability for professional charges, which was paid. As a result, the court concluded that the impugned order could not be sustained and required reconsideration. Consequently, the order dated 29.12.2023 was set aside, and the matter was remanded for reconsideration. The petitioner was allowed to submit additional documents within two weeks, and the respondent was directed to provide a reasonable opportunity for a fresh order within three months.

In conclusion, the writ petition was disposed of without costs, and connected miscellaneous petitions were closed. The judgment highlighted the importance of considering the petitioner's reply and documents in tax-related matters to ensure a fair decision-making process.