The Madras High Court set aside the GST ( Goods and Services Tax ) order issued against Elite Natural without recording proper reason for the rejection of the submission of the petitioner with respect to the Excess ITC, non-reversal of ITC concerning credit notes, selling and distribution expenses, and GST imposition on a reverse charge mechanism basis.
The petitioner, Elite Natural Private Limited filed 3 writ petitions challenging orders in original concerning assessment periods 2019-2020, 2020-2021, and 2021-2022, respectively.
The petitioner submitted that after receiving show cause notices dated 09.12.2023, it responded on 04.01.2024, addressing the four tax proposals. The impugned orders were issued post offering the petitioner a personal hearing.
The petitioner’s counsel argued that the tax proposals were contested under four heads. The counsel asserted that explanations were provided regarding excess Input Tax Credit (ITC), non-reversal of ITC concerning credit notes, selling and distribution expenses, and GST imposition on a reverse charge mechanism basis. However, the respondent, as per the counsel, failed to satisfactorily consider these explanations.
The respondent’s counsel acknowledged the petitions. He pointed out the absence of reference to the petitioner’s reply in the impugned orders and stated that supporting documents were allegedly not received.
Considering the petitioner’s reply to the department and the department’s record, the bench of Justice Senthilkumar Ramamoorthy noted that “the impugned order clearly indicate the complete failure of the respondent to engage with the submissions of the petitioner and record reasons in rejecting such submissions. Since findings were recorded without indicating any reasons for such findings, these orders cannot be sustained.”
Consequently, the court set aside the impugned orders and remanded the matters for reconsideration. The petitioner was granted permission to submit additional documents within 15 days, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, before issuing fresh reasoned orders within three months. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.
K.A.Parthasarathy appeared for the petitioner and V.Prashanth Kiran, Govt. Adv. (T) appeared for the respondents.
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