SCN which Lacks Essential Details of ITC under Question to be Dismissed: HC

Case Details: Balaji Electricals v. Appellate Authority & Joint Commissioner State Tax [2023] 151 taxmann.com 12 (Madhya Pradesh)

Judiciary and Counsel Details

• • Sheel Nagu & Hirdesh, JJ.
  • Kapil Duggal, Adv. for the Petitioner.
  • Darshan Soni, Adv. for the Respondent.

Facts of the Case

A show cause notice was issued to assessee under section 74(1) of Central Goods and Service Tax Act (the Act), 2017. It was submitted by the assessee that the said show cause notice did not satisfy the requirement of Rule 142 as it was vague to the extent of not communicating the relevant information and material. Therefore, it filed writ petition and contended that the final order passed by authority was vitiated in law since it was not able to respond to the show cause notice.

High Court Held

The Honorable High Court noted that as per Section 74 of the Act, the Revenue must ensure show cause notice to be speaking enough to enable assessee to respond to same. In the instant case, the bare reading of show cause notice revealed that it neither contained material and information nor statement containing details of ITC transaction under question.

The Court noted that the Statute itself prescribes for affording reasonable opportunity and it is incumbent upon Revenue to afford same and any deficiency in that regard vitiates the end result. Therefore, the Court held that the impugned orders and show cause notice were liable to be quashed.

List of Cases Reviewed

• • Sidhi Vinayak Enterprises v. The State of Jharkhand & ors (para 4.2) followed.