Matter to Be Remanded Since ITC Denied Without Any Finding That Supplier Didn’t Discharge Tax Liability | HC

Case Details: Hanuman Industrial Corporation v. Government of NCT of Delhi - [2024] 165 taxmann.com 485 (Delhi)

Judiciary and Counsel Details

• Vibhu Bakhru & Sachin Datta, JJ.
• M.A. Ansari & Ms Tabbassum Firdause, Adv. for the Petitioner.
• Rajeev Aggarwal, ASC & Shubham Goel, Adv. for the Respondent.

Facts of the Case

The petitioner received a show cause notice (SCN) from the department alleging that it had availed ITC from suppliers whose registration was cancelled. It submitted reply to SCN but the Adjudicating Authority passed an order confirming demand. It filed writ petition against the demand order and contended that the impugned order was passed mechanically without considering reply.

High Court Held

The Honorable High Court noted that the impugned order was passed confirming demand on the ground that the petitioner had availed ITC from “cancelled dealers, return defaulters & tax non payers” without specifying if such suppliers had not paid taxes or had not filed returns at material time. There was no finding that suppliers from whom the petitioner had availed supplies during material time had not discharged their tax liability by depositing tax with government either in cash or by availing ITC.

Thus, the Court held that the impugned order was to be set aside and matter was to be remanded. The Adjudicating Authority was also directed to decide matter afresh after affording the petitioner an opportunity of hearing as expeditiously as possible, preferably within a period of eight weeks.