Delhi HC directs Readjudication with respect to Demand raised on Account of Claim of GST ITC from Canceled Dealer [Read Order]

In a recent case, the Delhi High Court directed readjudication with respect to the demand raised on account of claim of Goods and Service Tax ( GST) Input Tax Claim ( ITC ) from the canceled dealer. 

The petitioner Jullundur Motor Agency Delhi Limited filed the writ petition  against the order passed under Section 73 of the Central Goods and Services Tax Act, 2017 by proposing a demand against the petitioner and has been disposed of and a demand of Rs. 2,23,79,924.00 including penalty has been raised against the petitioner.

Counsel for petitioner submitted that a detailed reply dated 27.10.2023 was filed to the Show Cause Notice and pursuant to the reply an authorized representative of the Petitioner attended the personal hearing and provided further clarification.

Further, in continuation to the reply dated 27.10.2023, another reply dated 28.11.2023 was filed by the Petitioner. However, the impugned order dated 30.12.2023 does not take into consideration the reply submitted by the petitioner and is a cryptic order.

Although to the said Show Cause Notice, detailed replies were furnished by the petitioner giving full disclosures under each of the heads.

Further the counsel for petitioner submits that a demand has been raised on account of claim of Input Tax Credit from the canceled dealer M/s Rane Brake Lining Limited. He further submits that the GST registration of M/s Rane Brake Lining Limited has been restored vide order dated 16.02.2024 in W.P. (C) 2259/2024.

Accordingly the bench observed that the impugned order dated 30.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was unsatisfactory, incomplete and not duly supported by adequate documents.

After analyzing the facts and arguments of both parties, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja held that the order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 30.12.2023 is set aside

Mr. Pulkit Verma and Mr. Peyush Pruthi, Advocates, Advocates appeared for the petitioner and Mr. Prasanta Varma, SCGC with Mr. Pankaj Kumar, Ms. Pragya Verma and Mr. Rakesh Kumar Palo, Advocates for UOI, Advocates   appeared for the respondent.

To Read the full text of the Order CLICK HERE

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