The Delhi High Court directed to re-adjudicate the order rejecting the claim of excess Input Tax Credit ( ITC ) alleging improper Calculation/reconciliation. The court remitted the matter to the Proper Officer for re-adjudication. The Petitioner shall file replies to the Show Cause Notices within a period of 30 days.
Spinclabs Private Limited, the Petitioner impugns two orders both dated 31.12.2023, whereby impugned Show Cause Notices dated 05.09.2023 and 29.09.2023 proposing a demand of Rs.42,74,423.00 and Rs.33,32,254.00 respectively against the Petitioner have been disposed of and demand including penalty has been created against the Petitioner. The orders have been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (the Act).
Counsel for Petitioner submitted that Petitioner had filed detailed replies dated 14.12.2023 and 03.10.2023, however, the impugned orders dated 31.12.2023 do not take into consideration the replies submitted by the Petitioner and are cryptic orders.
The Department has issued both the notices on similar grounds and headings i.e., excess claim Input Tax Credit [“ITC”]; Scrutiny of ITC availed and scrutiny of ITC reversals, to the said Show Cause Notices, detailed replies were furnished by the petitioner giving disclosures under each of the heads
It was stated that “And whereas, in response to the DRC-01, the Taxpayer submitted his reply in DRC06. The reply of the registered person as well as data available on the GST Portal has been checked/examined and the reply/submission of the taxpayer is not found satisfactory due to the following reasons:- 1. Excess claim of ITC on reconciliation of information scrutiny of ITC availed.
The Taxpayer has not uploaded the copies of invoices duly mapped with corresponding bank payment details. The taxpayer has furnished plain reply which is not duly supported with proper calculations/reconciliation and relevant documents. 2. Excess claim of ITC on reconciliation of information scrutiny of ITC reversals. The Proper Officer has opined that the reply is unsatisfactory.
A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that the Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is unsatisfactory and reply is not supported with proper calculations/reconciliation and relevant documents, which ex-facie shows that the Proper Officer has not applied his mind to the replies submitted by the petitioner.
The court remitted the matter to the Proper Officer for re-adjudication. The Petitioner shall file replies to the Show Cause Notices within a period of 30 days. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notices after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act.
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