Case Law Details
Geethanjali Vs Assistant Commissioner of CGST & CE (Madras High Court)
The Hon’ble Madras High Court in the matter of Geethanjali v. the Assistant Commissioner of CGST & CE [W.P. No.35024 of 2022 and W.M.P. Nos. 34458 and 34461 of 2022 dated February 7, 2023] has held that the petition filed by the assessee challenging the Show Cause Notice (“SCN”) for reversal of Input Tax Credit (“ITC”) even before the final order has been passed, is considered to be premature and cannot be entertained. Directed the Revenue Department to consider the reply submitted by the assessee and decide on merits and in accordance with law.
Facts:
Geethanjali (“the Petitioner”) was presented with a SCN dated December 12, 2022 (“the Impugned SCN”) by the Revenue Department (“the Respondent”) on account of a mismatch, to intimate the Petitioner about the amount it is liable to pay towards GST in respect of certain tax invoices. It is alleged in the Impugned SCN that though the ITC in respect of the aforementioned invoices has been claimed by the Petitioner, the supplier has not paid the tax amounts to the Respondent. The Petitioner has furnished a detailed reply to the Impugned SCN on January 6, 2023 and such reply has been acknowledged by the Respondent on the same date.
Being aggrieved, this petition has been filed.
The Petitioner has contended that despite having furnished the details of the supplier to the Respondent in respect of the aforementioned invoices, the Respondent has once again sent the impugned notice to the Petitioner. Further, the Petitioner’s reply to the Impugned SCN has not been considered by the Respondent. Further that, only in case of collusion between the Petitioner and the supplier, the Respondent can proceed against the Petitioner.
Issue:
Whether the Impugned SCN is liable to be quashed before passing of final order?
Held:
The Hon’ble Madras High Court in W.P. No.35024 of 2022 and W.M.P. Nos. 34458 and 34461 of 2022 held as under:
- Observed that, the Petitioner has only challenged the Impugned SCN and no final order has been passed by the Respondent.
- Noted that, the Petitioner has filed this petition prematurely as final order relating to the Impugned SCN has not been passed.
- Further noted that, the Respondent needs to consider the reply submitted by the Petition in respect to the Impugned SCN on merits and in accordance with law.
- Held that, the Impugned SCN has only made an intimation about the proposal to reverse the ITC availed by the Petitioner and no final order has been passed, therefore, the question of entertaining such petition will not arise.
- Directed the Respondent to consider the reply submitted by the Petitioner and decide on merits and in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner has challenged the impugned notice dated 12.12.2022 issued by the respondent. Under the impugned notice on account of the alleged mismatch, the respondent has intimated the petitioner about the amount they are liable to pay towards CGST and SGST in respect of tax invoices, dated 27.01.2018, 29.01,2018 12.02.2018, 12.02.2018 and 15.02.2018.
2. According to the respondent though the input tax credit in respect of the aforementioned invoices has been claimed by the petitioner, the supplier has not paid the tax amounts to the respondent. A detailed reply has been sent to the impugned notice dated 12.12.2022 by the petitioner dated 06.01.2023. As seen from the reply it has been acknowledged by the Superintendent of the GST department on the same date i.e., 06.01.2023 itself. The contention of the petitioner is as follows :-
a) Despite having furnished the details of the Seller to the respondent in respect of the aforementioned invoices, the respondent has once again sent the impugned notice to the
b) The petitioner’s reply sent earlier has not been considered by the respondent and in the said reply they had raised several objections in respect of the subject claim made by the respondent on account of the alleged mismatch.
c) Only in exceptional cases in case of collusion between the seller and the purchaser, the respondent can proceed against the purchaser, the petitioner herein.
d) the respondent has not followed the press note issued by the GST council, which is the highest authority in the Department of Revenue. The respondent failed to note that the Assessment Years involved in the impugned proceedings are 2017-18, 2018-19 and 2019-20 and Section 42 of the GST Act was omitted only from 01.10.2022 and therefore, the law as on that date is to be followed.
3. The petitioner has also relied upon certain decisions of the Hon’ble Supreme Court in support of her stand.
4. Admittedly, the petitioner has challenged only the notice in this writ petition. No final orders have been passed by the respondent in respect of the amounts claimed by them in the impugned notice against the Even before a final order has been passed, the petitioner has chosen to file this writ petition, which in the considered view of this Court is premature. However, the adjudicating authority will have to necessarily consider the reply submitted by the petitioner in respect of the impugned notice dated 12.12.2022 on merits and in accordance with law. As seen from the impugned notice only an intimation has been made by the respondent to the petitioner about the proposal to reverse the input tax credit availed by the petitioner and no final order has been passed. Hence, the question of entertaining this writ petition at this stage will not arise.
5. For the foregoing reasons, this writ petition is disposed of by directing the adjudicating authority to give due consideration to the reply dated 06.01.2023 submitted by the petitioner and to take a final decision on merits and in accordance with law and the respondent, if they come to the conclusion that the reply is acceptable to them, they shall drop any further proceedings against the petitioner, but if they decide otherwise, the respondent shall follow the due procedure established under law for taking further action against the petitioner. No costs. Consequently, connected miscellaneous petitions are closed.
*****
(Author can be reached at info@a2ztaxcorp.com)
Author Bio
