In a recent case, the Delhi High Court directed readjudication with respect to the Show Cause Notice (SCN) issued for Input Tax Claim (ITC) after giving an opportunity for hearing.
The A B Traders filed the writ petition challenging the Show Cause Notice issued for proposing a demand of Rs 44,48,488 00 against the Petitioner and a demand including penalty has been raised against the Petitioner.
Counsel for petitioner submitted that Petitioner had filed a detailed reply dated 23.10.2023, however, the impugned order dated 25.12.2023 does not take into consideration the reply submitted by the Petitioner in full consideration and has passed a cryptic order.
Further argued that the Department has given separate headings i.e., under declaration of output tax; excess claim Input Tax Credit (ITC) and ITC claimed from canceled dealers, return defaulters and tax non-payers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving disclosures under each of the heads.
It was observed that the order does not specifically deal with the reply dated 23.10.2023 given by the petitioner, however, refers to certain judgment to hold that the burden to prove admissibility of any input tax credit cannot be shifted to the Tax Authorities.
The Proper Officer has not even considered the reply of the petitioner along with the enclosed documents and merely held that the burden cannot be shifted on the Tax Authorities.
The Proper Officer had to examine the documents submitted by the petitioner and then hold whether the input tax credit is admissible or not. The Proper Officer has not stated as to why such transactions are not acceptable.
After analyzing the facts and arguments of both parties, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja set aside the order the matter is remitted to the Proper Officer for re-adjudication and also directs the petitioner to file documents for support of his reply to the Show Cause Notice and thereafter the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing.
Mr. Rajesh Mahna, Mr. Ramanand Roy, Mr. Mithlesh Kumar Tiwari, Mr. Mayank Kouts, Mr. Shiva Narang and Mr. Silky Wadhwa, Advocates appeared for the petitioner and Mr. Rajiv Aggarwal, ASC with Ms. Samridhi Vats, Advocate appeared for the respondent.
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