Delhi HC Sets Aside SCN Alleging Wrongful Availment of ITC u/s 73 of CGST Act, Grants Two Weeks Extension for Submitting Supporting Documents [Read Order]

The Delhi High Court has set aside a show cause notice (SCN) alleging wrongful availment of Input Tax Credit (ITC) under Section 73 of the Central Goods and Service Tax Act and has granted a two-week extension for submitting supporting documents. The adjudicating authority was directed to pass a new order after providing the petitioner with an opportunity to be heard.

The petitioner, R L Enterprises challenged the order dated 24.12.2023 passed under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017 and the State Goods and Services Tax (SGST) Act, 2017. The order, issued pursuant to a Show Cause Notice (SCN) dated 22.09.2023, alleged that the petitioner had wrongfully availed Input Tax Credit (ITC) on the basis that the registration of certain suppliers from whom the petitioner had received supplies had been canceled.

The petitioner responded to the SCN on 30.10.2023, asserting that the suppliers were duly registered under the CGST and SGST Acts at the time of the transactions. The petitioner also confirmed that the invoices were paid, including the Goods and Services Tax (GST), thereby entitling them to claim the ITC.

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However, the adjudicating authority had not considered this contention in its order. During the hearing, counsel for the respondents, Mr. Singhvi, conceded that the impugned order could be set aside, and the matter could be remanded to the adjudicating authority for a fresh decision.

Consequently, the division bench of Justice Vibhu Bakhru and Justice Sachin Datta set aside the impugned order and granted the petitioner two weeks to submit all relevant documents supporting their claim to the ITC. The adjudicating authority was directed to pass a new order after providing the petitioner with an opportunity to be heard. The petition was disposed of in line with these directions.

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