2024 (4) TMI 296 - HC - GST

Blocked input tax credit - issuance of credit notes by the supplier - denial of Input Tax Credit with regard to certain inputs - HELD THAT - Except for holding that the tax payer had availed Input Tax Credit which is blocked credit under Section 17(5) no reasons are specified as to why such Input Tax Credit was denied. The impugned order is set aside in relation to these three issues and remanded for re-consideration. The first respondent is directed to provide a reasonable opportunity to the petitioner including a personal hearing and thereafter issue a fresh order within two months from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues involved: Challenge to an order in original u/s three issues - issuance of credit notes, freight charges, and Input Tax Credit availed.

Issuance of credit notes: Petitioner challenged the order stating that arguments were advanced previously and the matter was remanded to the assessing officer. Petitioner provided sample invoices and evidence of bifurcation of freight payments for the relevant unit. Counsel argued that the impugned order did not consider the documents submitted by the petitioner.

Freight charges: Respondent contended that tax demand was confirmed after evaluating evidence presented by the petitioner. Additional Government Pleader argued that the petitioner had sufficient opportunity to provide evidence and that such evidence should not be re-appraised in Article 226 proceedings. Input Tax Credit disallowed based on the items not qualifying for credit as per the impugned order.

Input Tax Credit availed: Petitioner challenged the denial of Input Tax Credit on certain items, arguing that the impugned order did not provide reasons for disallowing the credit. The order only mentioned that the credit was blocked under Section 17(5) without specifying the reasons for denial.

Conclusion: The impugned order was set aside for the three issues discussed and remanded for re-consideration. The first respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within two months. The observations in the order were not binding on the first respondent during re-consideration. Case disposed of with no costs.