In a recent case, the Delhi High Court directed the initiation of proceedings only after issuing a proper Show Cause Notice (SCN) containing complete details regarding Input Tax Credit (ITC). The writ petition was filed by RS Wires Industries against the show cause notice issued by the respondent under Section 29 of the Goods and Services Tax Act.
During the proceedings, R. P. Singh, the counsel for the petitioner, argued that the show cause notice issued under Section 29 of the Goods and Services Tax Act, 2017, was defective as it lacked details about the alleged wrongful availment or utilization of input tax credit. It was further argued that the details enclosed with the show cause notice were merely a photograph of an unknown individual. The revocation petition filed by the petitioner was also rejected without proper reasoning.
The court observed that the show cause notice dated 18.04.2022, seeking cancellation of registration, provided the reasons for cancellation as “Wrongful availment or utilization of Input Tax Credit (details notice enclosed).” However, the court noted that neither the show cause notice nor the order rejecting the revocation application contained any details or reasons regarding the alleged wrongful availment or utilization of input tax credit.
After analyzing the facts and arguments of both parties, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja allowed the writ petition and directed respondent to initiate appropriate proceedings in accordance with law after giving a proper show cause notice containing complete details.
Rajeev Aggarwal with Ms. Samridhi Vats, Advocates, appeared for the revenue.
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