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2023 (12) TMI 825 - HC - GST


Issues Involved:
Challenge to show cause notice dated 01.04.2021 regarding Input Tax Credit availed under various tax Acts. Premature filing of writ petition against show cause notice.

Issue 1: Input Tax Credit Discrepancy
The petitioner, engaged in importing and trading of kitchen and household articles, faced allegations of mismatch in Input Tax Credit availed and eligible credit reflected in GSTR-2A statements for CGST, IGST, and SGST Credits. The audit conducted by the 1st respondent for the period July 2017 to March 2019 revealed that excess credit was taken by the petitioner without reversing it, despite a mismatch in the details of outward supplies furnished by the suppliers.

Issue 2: Show Cause Notice Challenge
The impugned Show Cause Notice No. 78/2021 dated 01.04.2021 proposed to recover ineligible credit under Section 73(1) of the CGST Act along with interest. The petitioner contended that they rightfully took Input Tax Credit based on payments made to suppliers, even if the suppliers' returns did not accurately reflect these payments. Citing a previous judgment, the petitioner argued that recipients have the right to take credit when payments, including taxes, have been made to suppliers.

The Court acknowledged the respondent's objection that the writ petition was premature, emphasizing that the jurisdiction under Article 226 should not be invoked routinely at the show cause notice stage. It was noted that tax liabilities involve disputed factual questions best addressed before department authorities, as highlighted in the case of Union of India v Bajaj Tempo Ltd (1998) 2 SCC 281. Therefore, the Court declined to entertain the writ petition against the show cause notice, advising the petitioner to submit objections within four weeks. The petitioner was encouraged to rely on relevant provisions or judgments, with assurance that objections would be duly considered, and orders passed after affording the petitioner a legal opportunity. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.

 

 

 

 

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