2024 (7) TMI 745 - HC - GST

Violation of principles of natural justice - order challenged on the ground of non consideration of the petitioner's reply - wrongful availment of input tax credit - HELD THAT - The respondent did not closely examine the documents submitted by the petitioner, such as invoices, e-way bills, etc. Instead, a conclusion was drawn that the petitioner failed to establish movement of goods. In these circumstances, re-consideration is necessary. The impugned order dated 17.08.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within fifteen days from the date of receipt of a copy of this order and the matter is remanded for re-consideration. Within the said period, the petitioner is permitted to submit additional documents, if any - petition disposed off.

Summary

Issues:
Challenge of order on non-consideration of petitioner's reply regarding Input Tax Credit for purchases from a specific trader.

Analysis:
The petitioner challenged an order dated 17.08.2023, citing non-consideration of their reply to a show cause notice regarding alleged wrongful availment of Input Tax Credit for purchases from a particular trader. The petitioner received the show cause notice on 02.11.2022 and responded on 08.12.2022. The petitioner contended that they had submitted various documents to establish the genuineness of the purchase, including purchase invoices, e-way bills, and bank statements. However, the Input Tax Credit was reversed without examining these documents. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.

The respondent, represented by the Additional Government Pleader, argued that the principles of natural justice were followed, as intimation, show cause notice, and reminders for a personal hearing were issued. The rejection of the Input Tax Credit claim was justified on the grounds that the petitioner failed to prove the movement of goods. The impugned order mentioned that the petitioner had enclosed purchase bills, transport copies, and payment records, but it was found that the records for goods movement, such as online payment of freight charges, were not produced. Additionally, it was established that the specific trader was a bill trader.

The court observed that the respondent did not thoroughly examine the documents submitted by the petitioner, leading to the erroneous conclusion that the movement of goods was not established. Therefore, the court set aside the impugned order on the condition that the petitioner remits 10% of the disputed tax demand within fifteen days and the matter is remanded for re-consideration. The petitioner was allowed to submit additional documents within the specified period. Once satisfied with the additional documents and receipt of the remittance, the respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months. Consequently, the bank attachment was lifted, and the case was disposed of with no costs incurred.