2021 (12) TMI 1098 - HC - GST

Violation of principles of natural justice - disallowance of input tax credit - petitioner submitted that the said Assessment Order is absolutely illegal as far as the petitioner is concerned, since it has been passed ignoring the documents filed by the petitioner - HELD THAT - Though learned counsel for the petitioner has raised issues which require consideration, but since the same are based on facts which are still not admitted or proved, the exercise has to be gone into initially with regard to the factual aspect of the matter and thereafter only the law can be applied once such factual aspects are clear before the concerned authority or the Court. This Court also feels that the matter can better be appreciated and gone into by the Appellate Authority which would be in a position to take a view with regard to issues raised by the petitioner in accordance with law after giving full opportunity of hearing to the petitioner - this Court is not inclined to entertain the writ petition for the present. Petition disposed off.

Summary

Issues Involved:
Petitioner challenging Assessment Order disallowing Input Tax Credit under IGST Act, 2017 and imposing penalty and interest.

Detailed Analysis:

Issue 1: Assessment Order and Legal Challenge
The petitioner, a steel articles manufacturer, challenged an Assessment Order disallowing Input Tax Credit (ITC) under the IGST Act, 2017, and imposing a penalty and interest. The impugned order directed the petitioner to pay a substantial amount as GST, penalty, and interest. The petitioner contended that the order was arbitrary, lacked jurisdiction, violated natural justice principles, and was illegal.

Issue 2: Petitioner's Argument
The petitioner argued that the Assessment Order was illegal as it disregarded crucial documents submitted, such as tax invoices, e-Sugam for goods transportation, stock registers, bank ledgers confirming payments, and GST returns. The petitioner maintained that they had paid the necessary GST to the vendor for the purchased goods, and the vendor's fraudulent activities should not render the petitioner liable for tax evasion.

Issue 3: Legal Proceedings and Appellate Authority
The petitioner sought direct intervention from the Court due to alleged violations of natural justice and lack of consideration by the Assessing Authority. The petitioner expressed concerns about the independence of the Appellate Authority, suggesting it would not provide a fair review. The Government Pleader argued that the Appellate Authority would objectively assess the factual and legal issues, including the vendor's fraudulent actions.

Issue 4: Court's Decision
The Court acknowledged the issues raised by both parties but emphasized the need to establish facts before applying the law. It deemed the Appellate Authority better equipped to delve into the factual complexities and legal arguments presented. Consequently, the Court declined to entertain the writ petition and directed the petitioner to approach the Appellate Authority for a thorough review, ensuring a fair hearing and reasoned decision.

Conclusion:
The Court disposed of the Writ Petition, granting the petitioner liberty to pursue the matter before the Appellate Authority. It clarified that the Appellate Authority must independently evaluate all aspects raised by the petitioner, without influence from superior authorities. The Court refrained from expressing any opinion on the case's merits, leaving it for the Appellate Authority to adjudicate. No costs were awarded, and any pending miscellaneous petitions were also disposed of.