Adjudicating Authority Directed to Consider Assessee’s Contention on Non-Availment of ITC on Supply of Textbooks | HC

Case Details: Leadership Boulevard (P.) Ltd. vs. Union of India - [2025] 171 taxmann.com 708 (Bombay)

Judiciary and Counsel Details

• Firdosh P. Pooniwalla & B.P. Colabawalla, JJ.
• Sriram Sridharan, Vidhi Jain, Shanmuga Dev & Aditi Jain for the Petitioner.
• Jitendra B. Mishra, Ms Sangeeta Yadav & Rupesh Dubey for the Respondent.

Facts of the Case

The petitioner, engaged in providing platform solution services, also sold textbooks and treated their sale as an exempt supply, reversing the Input Tax Credit (ITC) accordingly. A Show Cause Notice was issued, alleging that GST was payable on the supply of textbooks, as they were an ancillary supply to the principal supply of platform solution services, making the transaction a composite supply under Section 2(30) of the CGST Act, 2017. The petitioner contended that it had already reversed ITC on the sale of books and that this factual position was neither considered nor recorded in the Show Cause Notice. The department responded that any further submissions should be made before the adjudicating authority. Aggrieved, the petitioner approached the Bombay High Court, seeking to quash the department’s communication and restrain proceedings concerning ITC voluntarily reversed.

High Court Held

The Hon’ble Bombay High Court held that the adjudicating authority must consider the petitioner’s contention regarding the non-availment of ITC and its effect when deciding the Show Cause Notice. Additionally, the authority was directed to determine whether the petitioner was entitled to ITC if it was ultimately found liable to pay tax. The Court extended the time for passing the order and directed that the petitioner be granted a hearing to submit relevant documents on the ITC issue. All contentions on merits were kept open, and the writ petition was disposed of accordingly.