Grave violation of Natural Justice Principles: Madras HC remands Penalty Levy for GST ITC Claim based on bogus Tax Invoices/Debit Notes [Read Order]

The Madras High Court recently quashed the impugned penalty levy in violation of natural justice principles against the Input Tax Claim of assessee, M/s Hind Aluminium Company on the basis of alleged bogus tax invoices and debit notes.

P. Rajkumar appeared for the petitioners and AGP C Harsha Raj represented the state-revenue.

It was contended that, the impugned order has been passed by total non application of mind to the reply sent by the petitioner. Under the impugned order passed under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017, the petitioner has been levied with penalty for claiming input tax credit based on bogus tax invoices / debit notes.

The counsel for the petitioner drew the attention of the Court to the relevant documents filed in support of the aforementioned contentions. Being convinced of the same, The Madras High Court Single Bench of Justice Abdul Quddhose observed that,”‘On a prima facie consideration, the show cause notice sent to the petitioner by the respondents is also bald and cryptic and the exact details of the violations committed by the petitioner have not been disclosed in the said show cause notice.”

“The show cause notice has simply extracted the ingredients of Section 74 of the Act but the same does not disclose the details of the violations committed by the petitioner”, the court further noted.

It was thereby held that, “the impugned order has to be necessarily quashed and the matter will have to be remanded back to the respondents for fresh consideration on merits and in accordance with law after affording a fair hearing to the petitioner, including granting them the right of personal hearing”, in favour of the petitioner M/s Hind Aluminium Company.

To Read the full text of the Order CLICK HERE

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