Shri Keshav Cements And Infra Ltd. Vs Dy. Commissioner of Commercial Taxes (Audit) (Karnataka High Court)
The writ petition before the Karnataka High Court challenged a GST demand order passed by the Deputy Commissioner of Commercial Taxes (Audit), Bagalkot, primarily on the ground of violation of the mandatory requirement of personal hearing under Section 75(4) of the CGST/KGST Act.
The petitioner is a public limited company registered under the Karnataka Goods and Services Tax Act, 2017, engaged in the manufacture of cement and generation of electricity through solar power. It operates two cement manufacturing units and has installed captive solar power plants at Bisarahalli village, Koppal district. A 20 MW solar power plant was commissioned with effect from 01.04.2018 pursuant to government approval, and later an additional 10 MW plant became operational during the financial year 2021–22. The electricity generated from these plants was used captively for the petitioner’s manufacturing activities.
For setting up the solar power plant, the petitioner procured capital goods and services and availed Input Tax Credit (ITC). Seeking clarity, the petitioner approached the Authority for Advance Ruling under the CGST/KGST Act regarding eligibility of ITC on capital goods and input services related to erection, installation, and commissioning of the solar power plant. The Authority for Advance Ruling passed an order under Section 98(4) of the CGST Act holding that ITC was admissible, as the electricity generated was captively consumed by the petitioner and transmitted exclusively to its cement plants.
