Appellate Authority cannot Travel Beyond Allegation of Show Cause Notice: Calcutta HC orders to Consider Submissions on ITC Filing [Read Order]

A division Bench of the Calcutta High Court ordered the Original Authority to consider submissions on Input Tax Credit (ITC) filing and observed that an Appellate authority cannot travel beyond allegation of show cause notice. The writ petitioner in the present matter is Earthmark Traders.

The intra-Court appeal was directed against the order passed by the Single Bench in WPA 7905 of 2023 thereby declining to grant interim order in the writ petition. The prayers sought for in the writ petition are to quash the order passed by the original authority rejecting the claim for refund of the un-utilised input tax credit and also the order passed by the appellate authority affirming such order.

In terms of the liberty granted, the appellant stated to have uploaded its reply wherein it has been mentioned that copies of the documents will be submitted to the authority in physical form as it is voluminous, the same cannot be uploaded in the system. It was also not clear as to what happened thereafter but the appellant was issued show cause notice calling upon the appellant to show cause as to why the refund claim should not be rejected or the amount erroneously refunded should not be recovered.

The Appellate Authority has recorded a finding that he has reason to believe that the evidence does not prove the claim of the appellant that the goods were exported and, therefore, the refund claim is not sustainable.

A Bench comprising of Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya observed that “In any event, the appellate authority could not have travelled beyond the allegation of the show cause notice as pointed out earlier, the show cause notice itself is defective on account of non-consideration of the submission of the appellant to the memo and non-consideration of the documents which were produced by the appellant along with its response to the said show cause notice.”

“The matter shall stand remitted to the Original Authority. The Original Authority shall allow the assessee to submit additional explanation to the allegations contained in the show cause notice and file additional documents and after which an opportunity of personal hearing to the authorized representative of the appellant shall be afforded” the Bench noted.

To Read the full text of the Order CLICK HERE

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