2025 (7) TMI 1196 - HC - GST

Maintainability of petition - availability of alternative remedy - Disallowance of ITC - adequate opportunity has not been given to the appellant/petitioner - HELD THAT - As could be seen from the order in original the adjudicating authority issued notices to the appellant not once but three times to appear before him i.e. 17th January 2024 31st January 2024 and 15th February 2024 to attend the personal hearing but none appeared. Thus it is not a case of violation of the principles of natural justice but a case where the appellant failed to utilise the opportunity granted to it. The appellant is not justified to bypass the statutory appellate remedy. Apart from that the appellant has been in the business for more than 19 years and it is not a dealer who was registered with the Department very recently and is well-aware with the business practices pay the statutory requirements to be complied with under the various taxation laws - the learned Single Bench has rightly relegated the appellant to file a statutory appeal before the appellate authority and we find no ground to interfere with the order impugned. Appeal dismissed.

Summary

ISSUES:

Whether the Input Tax Credit availed by the appellant was irregular and liable to be disallowed under Section 73(9) of the CGST Act, 2017 read with corresponding provisions of the W.B.G.S.T. Act, 2017 and Section 20 of the I.G.S.T. Act, 2017.Whether the appellant was denied adequate opportunity of personal hearing before the adjudicating authority, thereby violating principles of natural justice.Whether the appellant can bypass the statutory appellate remedy on the ground of inability to make the required pre-deposit for filing an appeal.Whether the adjudicating authority's order for recovery of excess Input Tax Credit, short payment of tax, interest, and imposition of penalty is sustainable.

RULINGS / HOLDINGS:

Input Tax Credit availed by the appellant was rightly disallowed as "irregular" under Section 73(9) of the CGST Act, 2017 and corresponding provisions, and recovery along with interest and penalty was correctly ordered.The appellant was not denied adequate opportunity of personal hearing; notices were issued on three separate occasions, but the appellant failed to appear, thus there was no violation of the "principles of natural justice."The appellant is not justified in bypassing the statutory appellate remedy despite failure to pay the substantial pre-deposit; the learned Single Bench correctly relegated the appellant to avail the statutory appellate remedy.The order impugned was rightly upheld, and the appeal was dismissed with liberty granted to file appeal before the Commissioner of Central Tax (Appeal - I) within 60 days subject to pre-deposit condition, with assurance that limitation will not be a ground for rejection and appeal will be decided on merits after due opportunity.

RATIONALE:

The Court applied the statutory provisions under Section 73(9) of the CGST Act, 2017, corresponding provisions of the W.B.G.S.T. Act, 2017, and Section 20 of the I.G.S.T. Act, 2017 concerning Input Tax Credit disallowance and recovery.The Court emphasized adherence to "principles of natural justice," noting that multiple notices for personal hearing were issued but not availed by the appellant, negating any claim of denial of opportunity.The Court recognized the statutory appellate framework requiring pre-deposit for filing appeals and rejected the appellant's plea to bypass this remedy despite the financial burden, underscoring the appellant's long-standing business experience and awareness of statutory requirements.The Court noted that a Director of the appellant had responded to summons and admitted violations, undermining the appellant's claim of inability or ignorance to appear for hearings.No dissent or doctrinal shift was indicated; the judgment affirmed the established procedural and substantive tax law principles.