ITC Claimed more than Permissible: Madras HC sets aside GST Assessment Order Considering Hearing not provided on 10% Pre-deposit [Read Order]

In a recent ruling, the Madras High Court set aside the assessment order in a GST dispute and granted the petitioner a final opportunity to deposit 10% of the disputed tax within four weeks.

The petitioner has approached the High Court against the order passed by the GST department, as it was illegal, arbitrary, and against the principles of natural justice.

Complete Draft Replies of GST ITC Related Notices, Click Here

The main issue in this case relates to the discrepancies in the Input Tax Credit (ITC) claimed by the petitioner under the Goods and Services Tax (GST) regime for the assessment year 2019-2020.

The petitioner is engaged in the trade of civil construction works. For the assessment year 2019-20, GST returns as well as appropriate taxes were paid by the petitioner.

During the examination, the department observed that the petitioner claimed more ITC than permissible due to non-reconciliation of returns and related documents, such as GSTR-1, GSTR-2A, and GSTR-3B.

Complete Draft Replies of GST ITC Related Notices, Click Here

It is to be noted that the impugned assessment order was passed by the department, as even after giving multiple opportunities through notices and hearings, the petitioner failed to provide the necessary documents to justify the ITC claims. 

The counsel on behalf of the petitioner contended that the petitioner is willing to pay 10% of the disputed tax if they are granted one final opportunity before the adjudicating authority to put forth their objections to the proposal.

The bench, comprising Justice Mohammed Shaffiq, set aside the impugned order on the condition that the petitioner should deposit 10% of the disputed tax within a period of four weeks from the date of copy of the order of the court.

The petitioner was represented by Mr. K.M. Malarmannan and the respondent by  Mr. T.N.C. Kaushik.

To Read the full text of the Order CLICK HERE

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