SCN to Be Quashed As No Clarity Was Given By Dept. on Allegations of Availing Fraudulent ITC: HC

Case Details: Kundan Impex v. Principal Commissioner of Department of Trade and Taxes - [2024] 158 taxmann.com 300 (Delhi)

Judiciary and Counsel Details

• • Sanjeev Sachdeva & Ravinder Dudeja, JJ.
  • Pranay Jain & Karan Singh, Advs. for the Petitioner.
  • Rajeev Aggarwal, Assistant Standing Counsel for the Respondent.

Facts of the Case

The petitioner was a registered assessee and it was engaged in the business of trading of goods. The department issued a show cause notice (SCN) for suspension of registration. The petitioner filed writ petition against the SCN and contended that the SCN did not contain requisite details and was not sustainable.

High Court Held

The Honorable High Court noted that the SCN was issued to petitioner whereby registration of petitioner was suspended but it did not contain any reason or detail but merely refers to letter of Assistant Commissioner. The Court also noted that the letter issued by department also did not give any clarity as to allegation of availing of fraudulent input tax credit by the petitioner.

Therefore, the Court held that the SCN was to be set aside. However, it would be open to the department to take further action in accordance with law inter alia, cancellation of registration with retrospective effect but the same would be in accordance with law and pursuant to a proper Show Cause Notice and an opportunity of hearing being given to the petitioner.