APN Sales And Marketing Vs Union of India & Anr. (Delhi High Court)
Summary: Delhi High Court in APN Sales and Marketing Vs Union of India & Anr. [W.P. (C) No. 9536 of 2024] emphasized that a legal order cannot extend beyond the scope of the Show Cause Notice (SCN) and must include clear reasoning. The case involved M/s APN Sales and Marketing, which was issued an SCN alleging incorrect Input Tax Credit (ITC) claims due to supplier registration cancellations. The SCN demanded ₹17,43,356, citing Section 16(2)(c) of the CGST Act. However, the subsequent order raised a higher demand of ₹18,30,522 without adequately addressing whether the supplier, Modern Traders, had deposited the taxes or delivered goods, key allegations from the SCN. The petitioner challenged the order for being unreasoned and contrary to the SCN’s premise. The High Court set aside the order, remanding the matter for fresh adjudication with a directive to provide the petitioner an opportunity to submit additional evidence. The court reiterated the importance of adhering to the SCN and delivering reasoned decisions, observing that unsubstantiated claims of “Good-less invoices” or unsatisfactory replies are insufficient for a valid order. The decision reaffirms adherence to principles of natural justice, ensuring taxpayers are not penalized for issues beyond their control without due evidence.
