Violation of Natural Justice and HC Order: Madhya Pradesh HC quashes Post-decision hearing notice of disallowance of GST ITC Credit Claim [Read Order]

Violation of Natural Justice - Madhya Pradesh High Court - notice - GST - ITC - ITC Credit - Claim - taxscan

A Single Bench of the Madhya Pradesh High Court has recently quashed and set aside the post-decisional hearing notice served on the assessee on rejection of the Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) claim.

The petitioner-N P infra Projects Private Limited sought for quashing notice in the form of post decisional hearing and has been issued without complying with the direction passed in WP 26509/2018. Amendment of registration application by reopening the access to the Goods and Services Tax Network Portal was also prayed for.

The petitioner also asked for allowing rectification and to regularize the credit of tax paid on purchases and to utilize the same as set off against final payment of the tax. The petitioner also prayed for a direction to the respondents to not disallow the Input Tax Credit (ITC) and to not levy penalty or interest on the GST dues caused by non-filing of returns.

Vivek Dalal, for the petitioner submitted that by order passed in W.P. 26509/2018 the Nodal Officer was directed to consider the complaint/representation made by the petitioner and to take a decision thereon within a period of two weeks. It was submitted that since the matter has not been decided by the Nodal Officer in terms of order passed by this Court, the impugned notice ought not to have been issued.

Bhuwan Deshmukh, for the state pointed out that in the Notice dated 4.10.2022 itself, it has been stated that the petitioner may furnish his clarification alongwith relevant documents and thereafter only further proceedings shall be conducted. He further submitted that the petitioner ought to have submitted his explanation as directed and not straight away approached this Court.

The Bench of High Court Justice Pranav Verma observed that “From the record it is apparent that this Court by order dated 08.05.2019 passed in W.P. No. 26509/2018 had directed the complaint/representation of the petitioner to be considered within two weeks. The same was made by the petitioner on 20.05.2019 and as per the petitioner, the same has not been decided till now and the impugned notice has been issued.”

The Madhya Pradesh High Court thus directed that “the Nodal Officer shall take a decision thereupon within a period of six weeks from the date of receipt of certified copy of this order and thereafter only the respondents shall proceed further in the matter pursuant to the notice”, quashing the impugned notice and order.

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Counsel for Appellant:   SHRI VIVEK DALAL

Counsel for Respondent:   SHRI BHUWAN DESHMUKH


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