2024 (8) TMI 245 - HC - GST

Claim of excess Input Tax Credit - reply to the impugned SCN not considered - violation of principles of natural justice - HELD THAT - It is apparent that the adjudicating authority has not considered the reply to the impugned SCN submitted by the petitioner and has confirmed the demand as proposed, by the impugned order. The impugned order does not indicate any reason as to why the reply of petitioner that it had paid the subject tax with interest and had not availed ITC was rejected - the impugned order is not informed by reason. The matter remanded to the adjudicating authority to consider the petitioner s response to the impugned SCN and decide afresh after affording an opportunity of hearing to the petitioner - petition disposed off by way of remand.

Summary

Issues:
Impugning orders under CGST and DGST Acts, Alleged difference in net tax, Excess Input Tax Credit (ITC) claim, Rejection of petitioner's response to Show Cause Notice (SCN), Lack of reasoning in impugned order, Challenge to notification extending time for order under CGST Act, Challenge to constitution of appellate authority.

Analysis:
The petitioner challenged orders dated 09.03.2024 and 28.04.2024 under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Delhi Goods and Services Tax Act, 2017 (DGST Act). The impugned orders were based on a Show Cause Notice (SCN) from 09.12.2023, alleging a difference in net tax and excess Input Tax Credit (ITC) claimed by the petitioner for the Financial Year 2018-19. The petitioner contended that it had paid the tax subject to demand and interest, disputing the need for further demand. It clarified not availing ITC from a supplier whose registration was canceled. The adjudicating authority confirmed the demand without considering the petitioner's response adequately, lacking reasoning in the decision.

The impugned order failed to provide a valid reason for rejecting the petitioner's response to the SCN, citing the response as incomplete and unsupported by adequate documents. The High Court set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision after considering the petitioner's response and granting a hearing. Additionally, the petitioner's challenge to notifications extending time under the CGST Act and the constitution of the appellate authority was not pressed at this stage, preserving the right to challenge them later if necessary.

In conclusion, the High Court disposed of the petition by remanding the matter to the adjudicating authority for a reasoned decision, while not passing orders on the challenges to the notifications and the constitution of the appellate authority at the current stage.