2025 (7) TMI 1197 - HC - GST

Violation of principles of natural justice - credit ledgers which were summarised by the Petitioner in respect of sundry creditors have in fact not been considered by the adjudicating authority - HELD THAT - Prima facie it appears that the credit leaders for the year 2017-2018 was not submitted but for the year April 2018 to March 2023 the same may have been submitted to the audit group. This fact should have been taken into consideration by the adjudicating authority. Under these circumstances this Court is of the view that the matter deserves to be remanded for reconsideration to the adjudicating authority. After considering the reply and any submissions made during the hearing the show cause notice shall be adjudicated afresh. The impugned order shall stand set aside - the present writ petition is disposed of.

Summary

ISSUES:

Whether the adjudicating authority erred in not considering the credit ledgers submitted by the petitioner in respect of sundry creditors for the period April 2018 to March 2023.Whether the adjudicating authority was justified in computing inadmissibility of Input Tax Credit (ITC) based on creditors reflecting in the balance sheet without complete submission of creditors' ledger.Whether the petitioner is entitled to have the deposited sum of approximately Rs. 32,00,000/- as ITC credited.Whether the impugned order can be challenged after the lapse of the prescribed period for filing an appeal.Whether the matter requires remand to the adjudicating authority for reconsideration of the documents submitted by the petitioner.

RULINGS / HOLDINGS:

The court held that the credit ledgers for the period April 2018 to March 2023 appear to have been submitted and "this fact should have been taken into consideration by the adjudicating authority."The adjudicating authority's computation of inadmissibility of ITC based solely on creditors reflecting in the balance sheet, without complete ledger submission, was found to be the basis for imposing tax and penalty amounting to Rs. 80,92,84,99/-, but the court found that the petitioner's submissions were not adequately considered.The petitioner's claim for credit of approximately Rs. 32,00,000/- deposited as ITC was not given due credit by the adjudicating authority, warranting reconsideration.The court noted the delay in challenging the order but prioritized substantive examination over procedural lapse, directing fresh adjudication.The court set aside the impugned order and remanded the matter to the adjudicating authority to consider the petitioner's composite reply and documents afresh, including granting a personal hearing.

RATIONALE:

The court applied principles relating to the entitlement and admissibility of Input Tax Credit under the relevant tax statutes, emphasizing the necessity of proper ledger submission to establish eligibility.The adjudicating authority's reliance on creditors reflecting in the balance sheet without full ledger details was held insufficient for denying ITC, as the petitioner had submitted relevant documents for a substantial period.The court underscored the importance of procedural fairness, including the right to be heard and the consideration of all relevant documents before imposing tax liabilities and penalties.No dissent or doctrinal shift was indicated; the judgment reaffirmed established legal principles regarding ITC claims and procedural fairness in tax adjudication.