Assessee Fails to Reply to SCN alleging it as Invalid: Allahabad HC grants One month To Submit Reply [Read Order]
Assessee – Fails – Reply – SCN – alleging – Allahabad – HC – Submit – Reply – TAXSCAN
Assessee – Fails – Reply – SCN – alleging – Allahabad – HC – Submit – Reply – TAXSCAN
In a recent ruling, the Allahabad High Court granted one month to submit the reply since the assessee failed to submit that alleging the Show Cause Notice (SCN) as invalid.
Sri Aloke Kumar, counsel for the petitioner, Sri Ankur Agarwal, counsel for the respondents nos.1 & 2 and Sri Gopal Verma, counsel appeared for respondent no.3.
A notice was served to the petitioner-M/s Abhay Traders on 22.06.2022 indicating that about two purchases made from M/s Raghav Enterprises vide Invoice Detail Nos.94 and 95 on 12 June 2018 of the value of Rs.2,64,022/- and Rs.8,00,088/-, it was found that there had been no actual supply of goods from M/s Raghav Enterprises to the petitioner.
It was also found that M/s Raghav Enterprises was a bogus firm. Under such circumstances, a notice was issued to the petitioner on 22 June 2022 asking it to reply as to why tax, penalty and interest be not imposed upon the petitioner. It was stated that because the petitioner had made a bogus supply, the Input Tax Credit, which the petitioner had claimed, was wrongly claimed.
The petitioner has submitted that the notice itself was vague and submitted that it was concluded that no goods had been supplied from M/s Raghav Enterprises to the petitioner-M/s Abhay Traders and, therefore, the conclusion itself was wrong.
However, the Department viewed that the report submitted by Special Investigation Branch was correct. A notice to that effect was also to have been given to the petitioner so that the petitioner could have replied that in fact, goods were purchased by the petitioner from M/s Raghav Enterprises and, therefore, the Input Tax Credit which the petitioner had claimed was by law.
In the case of Commissioner of Central Excise, Chandigarh Vs. Shital International reported that Apex Court observed that “it is trite law that unless the foundation of the case is laid in the show cause notice, the same cannot be treated as proper show cause notice and notice issued in a format without even striking out any relevant portion and without stating clear contraventions committed by the petitioner, will not substitute the requirement of proper show cause notice.”
It was evident from the impugned notice that it contains necessary details and grounds, which are the basis for issuing the same. Still, at the tail end of the impugned notice, instead of seeking a reply on the allegation mentioned in the impugned show cause notice issued under Section 74 (1) of the Act, 2017, the petitioner was directed to reply about the tax and penalty and it was stated that if no reply was furnished then order under Section 74(9) of the Act, 2017 would be passed.
A division Bench comprising Justice Siddhartha Varma and Justice Arun Kumar Singh Deshwal allowed the petitioner to file his reply/objection against the impugned notice and relevant material within one month.
To Read the full text of the Order CLICK HERE
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