GST Demand raises for ITC availment of Rs. 4 crores on Ground that Supplier's GST Registration Cancelled Retrospectively: Delhi HC directs for Fresh Hearing [Read Order]

In a recent ruling, the Delhi High Court has set aside a ₹4.34 crore GST ( Goods and Services Tax ) demand order under Section 73 of the GST Act raised against a proprietor for availment of the Input Tax Credit ( ITC ) on grounds that the supplier’s GST registration was cancelled retrospectively. The court directed the adjudicating authority to conduct a fresh hearing.

The dispute arose when the GST department raised the demand over ITC availed by APN Trading Co. from its supplier, M/s Essar Foods & Commodities, whose GST registration had been cancelled retrospectively from 30 November 2017. Based on this cancellation, the department issued a show-cause notice and subsequently passed an adjudication order under Section 73 of the CGST Act, confirming the demand and proposing reversal of the ITC claimed by the petitioner.

Also read: GST Portal Glitches: A comprehensive Overview, Challenges and Mitigation Measures

Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here

The Petitioner, Ashish Singhal challenged the order before the High Court, arguing that the retrospective cancellation of Essar Foods’ GST registration had already been set aside by a coordinate bench of the Delhi High Court in an earlier writ. Relying on this, the petitioner sought a fresh adjudication.

The division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta accepted the petitioner’s plea, set aside the impugned order issued under Section 73 of the GST Act  and directed the department to issue a fresh hearing notice. The petitioner has been granted 30 days to file a fresh reply.

The court ordered the department to provide access to the portal to the Petitioner in order to enable him filing the reply as also for accessing personal hearing notice, if so required.

Also read: Relief to Sun Pharma Laboratories Limited: CESTAT allows refund for Education Cess and Higher Education Cess while exempting excise Duty

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates