HC Set Aside Order As Assessee Was Asked to Appear for Personal Hearing Within 2 Hours of Receiving SCN

Case Details: Brakes India (P.) Ltd. v. Assistant Commissioner (ST) - [2024] 158 taxmann.com 219 (Madras)

Judiciary and Counsel Details

• • Senthilkumar Ramamoorthy, J.
  • N. Murali for the Petitioner.
  • C. Harsha Raj for the Respondent.

Facts of the Case

The petitioner was a registered person under the current GST regime. The department issued show cause notice (SCN) proposing to block petitioner’s Input Tax Credit (ITC) under Rule 86-A in respect of purchases made from a particular supplier. It filed writ petition against the order and contended that a reasonable opportunity was not provided to submit relevant documents and explain the facts and circumstances.

High Court Held

The Honorable High Court noted that the SCN was served on petitioner by e-mail and the personal hearing was fixed on the same date at 2.00 pm, i.e. within two hours from the time of receipt of e-mail. The Court further noted that the petitioner had been directed to reverse ITC of a substantial value and such action had been taken pursuant to the SCN, which the petitioner asserts was received on the date of hearing.

The Court observed that a reasonable opportunity was not provided to the petitioner to submit necessary documents and provide an explanation to the department. Therefore, the Court held that the impugned order was to be set aside and matter was to be remanded for re-consideration.