The Madras High Court, addressing a case involving the fraudulent claim of Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) based on bogus invoices discovered during an inspection, directed the GST department to provide the petitioner with a personal hearing.
During an inspection under Section 67 of the GST Act, authorities discovered that the petitioner had fraudulently availed ITC based on bogus invoices. Although notices in Form DRC-01A and DRC-01 were issued, the petitioner argued that these were not served through proper channels, such as Registered Post Acknowledgment Due (RPAD).
Complete Draft Replies of GST ITC Related Notices, Click Here
Instead, they were uploaded to the GST portal under the “View Additional Notices and Orders” section, which the petitioner claimed to be unaware of, resulting in their inability to participate in the adjudication proceedings.
The petitioner sought an opportunity to present objections and explain the alleged discrepancies. Citing a precedent in M/s. K. Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise, the petitioner requested the matter be remanded with a direction to pay 25% of the disputed taxes.
Complete Draft Replies of GST ITC Related Notices, Click Here
Justice Mohammed Shaffiq, after considering the submissions, set aside the impugned order and issued specific directions to ensure procedural fairness. The petitioner was instructed to deposit 25% of the disputed taxes within four weeks, with any amounts already recovered to be adjusted against this deposit.
The assessing authority was directed to verify the payments and notify the petitioner of any remaining balance within one week of receiving the order. The petitioner was required to clear the balance within three weeks of such intimation.
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