2023 (9) TMI 790 - HC - GST

Input tax credit - denial of credit on the ground that no goods have been supplied to the petitioner - HELD THAT - Considering that the petitioner has full opportunity to respond to the Show Cause Notice it is not considered apposite to interfere at this stage. The issues are required to be considered by the Adjudication authority in the first instance. However it is directed that in the event the petitioner responds to the Show Cause Notice the concerned officer shall consider the said response. If the concerned officer proposes to pass an adverse order he shall afford the petitioner full opportunity to be heard and shall pass a speaking order dealing with contentions as advanced by the petitioner. Petition disposed off.

Summary

Issues Involved:
The issues involved in the judgment are the quashing of Pre Show Cause Notice and Show Cause Notice by the Respondent Department u/s 74 of the GST Act, 2017, alleging availing of input tax credit against good-less invoices, and the petitioner's entitlement to refund for zero-rated supplies.

Quashing of Notices:
The petitioner filed a petition seeking the quashing of Pre Show Cause Notice and Show Cause Notice issued by the Respondent Department u/s 74 of the GST Act, 2017, alleging availing of input tax credit against good-less invoices. The petitioner contended that he had exported goods, availed input tax credit, and furnished relevant documents to establish receipt of goods. The petitioner argued that the suppliers had paid tax on the goods supplied, making the department's claim for tax recovery unjust. The court held that the issues should be considered by the Adjudication authority first, directing the concerned officer to consider the petitioner's response to the Show Cause Notice and pass a speaking order if proposing an adverse decision. The petitioner was given three weeks to respond to the Show Cause Notice, with the assurance that any response would be considered without delay bias.

Entitlement to Refund:
The petitioner, having exported goods and availed input tax credit to discharge IGST, claimed entitlement to a refund for zero-rated supplies. The petitioner argued that since the goods were exported, tax had been paid by the supplier, and seeking tax recovery twice was unjust. Despite providing relevant material, the Pre Show Cause Notice was not referenced in the subsequent Show Cause Notice. The court emphasized that the petitioner had the opportunity to respond to the Show Cause Notice, and any adverse order must be supported by a speaking order addressing the petitioner's contentions. The court disposed of the petition, directing the concerned officer to consider the petitioner's response and ensure a fair hearing before any decision is made.