RMZ Infinity (Chennai) Pvt. Ltd Vs Joint Commissioner of CGST & Central Excise (Madras High Court)
The petitioner challenged an Order-in-Original dated 04.02.2025 confirming part of the demand raised in a show cause notice issued under Section 74 of the CGST/TNGST Act read with Section 20 of the IGST Act for alleged wrongful availment of input tax credit (ITC), along with interest under Section 50 and penalty under Section 74. The show cause notice proposed recovery of ineligible ITC, appropriation of amounts already reversed through DRC-03 and GSTR-3B, recovery of interest, and imposition of penalty.
The petitioner, engaged in renting and leasing immovable properties, had initially refrained from availing ITC in view of the restrictions under Sections 17(5)(c) and 17(5)(d) of the CGST Act. Subsequently, relying on the Orissa High Court decision in Safari Retreats Pvt. Ltd., the petitioner informed the department through a representation dated 16.08.2019 of its intention to claim ITC on construction materials, capital goods, sanitary and plumbing materials, electrical and electronic goods, and various construction-related services. The representation sought approval from the department, but no approval or response was received. Thereafter, instead of claiming only the amount mentioned in the representation, the petitioner ultimately availed ITC amounting to ₹103,45,34,884 and later reversed substantial amounts under protest.
