The respondent denied Input Tax Credit (ITC) to the petitioner ...

Company denied tax credit due to alleged improper purchases, creditor non-payments, and auditor payments.

Case Laws     GST

September 9, 2024

The respondent denied Input Tax Credit (ITC) to the petitioner based on alleged purchase of goods under HSN 85171110, non-payment to creditors exceeding 180 days, and payments made to statutory auditors. The court held that the respondent failed to consider the petitioner's reply and confirmed the audit observations without providing a reasonable opportunity. Regarding payments to auditors, the show cause notice did not require producing invoices, which the petitioner has now submitted, necessitating reconsideration. On the alleged purchase of goods, the petitioner asserted dealing with online recharge coupons, not mobile phones, and had provided extensive documents during the audit, warranting reconsideration. Concerning non-payment to creditors, the petitioner clarified having only one creditor with a three-day credit period, and no evidence of non-payment beyond 180 days was presented. The impugned order was set aside, and the matter remanded for reconsideration by the respondent after providing a reasonable opportunity and personal hearing to the petitioner within three months.

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