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TMI BlogA fresh SCN should be issued to revise the demand raised in the SCNX X X X Extracts X X X X X X X X Extracts X X X X ..... A fresh SCN should be issued to revise the demand raised in the SCN - By: - CA Bimal Jain - Goods and Services Tax - GST - Dated:- 13-6-2024 - The Hon ble Madras High Court in the case of VELA AGENCIES REP BY ITS PROPRIETOR D. JAGANNATHAN VERSUS ASSISTANT COMMISSIONER ST FAC - 2024 (5) TMI 51 - MADRAS HIGH COURT held that an order should proceed based on the Show Cause Notice issued to the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Further, the demand mentioned in the Show Cause Notice cannot be modified in the order. A fresh Show Cause Notice must be issued to modify the demand. Facts: M/s. Vela Agencies ( the Petitioner ) received an Intimation dated November 24, 2022. The Petitioner replied to the Intimation on December 28, 2022, by stating that the Petitioner was a distributor of M/s. Aircel Limited (Aircel) and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unable to conduct business after February 28, 2018, due to the closure of the business of Aircel. Further, a Show Cause Notice dated December 29, 2022 ( SCN ) , was issued to the Petitioner to show cause as to why tax liability of INR 8,27,252/- should not be imposed concerning sales suppression, which was estimated based on the Input Tax Credit ( ITC ) availed of by the Petitioner and contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Petitioner was not entitled to ITC. However, an Order dated June 23, 2023 ( the Impugned Order ) was passed by the Assistant Commissioner ( the Respondent ) imposing the tax liability of INR 14,97,072/- and an equal amount of penalty by comparing the FORM GSTR-3B return and the FORM GSTR-2A . Further, a reversal was made of ITC from the electronic credit ledger of the Petitioner to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of INR 7,52,047/- on February 15, 2024. Hence, aggrieved by the Impugned Order, the present writ petition was filed by the Petitioner. Issue: Whether a fresh SCN should be issued to revise the demand raised in the SCN? Held: The Hon ble Madras High Court in VELA AGENCIES REP BY ITS PROPRIETOR D. JAGANNATHAN VERSUS ASSISTANT COMMISSIONER ST FAC - 2024 (5) TMI 51 - MADRAS HIGH COURT held as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: Observed that, the Petitioner was called upon to show cause concerning a sum of INR 8,27,252/-, which was arrived at on an assumption that there was sales suppression. However, the Impugned Order imposed a tax liability of INR 14,97,072/- by comparing the FORM GSTR-3B return and the FORM GSTR-2A and an equal amount of penalty. The Impugned Order did not proceed based on the SCN. It was also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iceable that the Petitioner's electronic credit ledger was debited to the extent of INR 7,52,047/-. In these circumstances, the Impugned Order cannot be sustained. Held that, if the Respondent intended to modify the tax proposal in light of the Petitioner's reply, a fresh Show Cause Notice should have been issued. Hence, the Impugned Order was set aside by leaving it open to the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to issue fresh proceedings by issuing a fresh Show Cause Notice to the Petitioner, and the present writ petition was disposed of. (Author can be reached at [email protected] ) - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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