In a recent case, the Delhi High Court directed readjudication with respect to the exparte demand created under Input Tax Credit due to failure to issue Show Cause Notice ( SCN ) regarding the Goods and Service Tax ( GST ) Input Tax Claim.
The petitioner Jain Cement Udyog filed the writ petition against the show cause notice and demand created under section 73 of the Central Goods and Services Tax Act, 2017
Perusal of the Show Cause Notice shows that the Department has given separate headings i.e., under declaration of output tax; excess claim of Input Tax Credit [ “ITC” ]; and ITC claimed from canceled dealers, return defaulters and tax non-payer.
After examining the exparte order it was observed that the Proper Officer has opined that despite providing another opportunity, neither an online reply has been filed nor has the petitioner appeared in person or through an authorized representative.
However the counsel for petitioner submits that the GST registration of the petitioner had been canceled retrospectively with effect from 26.07.2017
The Department acknowledges that if a taxpayer’s registration is canceled retroactively, they will not be able to use the portal. Therefore, the petitioner’s argument that he was not served with the contested Show Cause Notice and the contested order—which was issued after the registration was canceled—has weight.
It was observed that the impugned order which had been passed solely on account that petitioner had not filed a reply cannot be sustained. The matter is liable to be remitted to the Proper Officer for re-adjudication.
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
Mr. R.P. Singh, Advocate, Advocates appeared for the petitioner and Mr. Anurag Ojha, Senior Standing Counsel with Mr. Subham Kumar, Advocate for R-1. Mr. Rajeev Aggarwal, Additional Standing Counsel with Mr. Prateek Badhwar, Ms. Shaguftha H. Badhwar and Ms. Samridh Vats, Advocates. appeared for the respondent.
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