Case Law Details
Mrishi Marcndey India Ltd Vs Sales Tax Officer (Delhi High Court)
In a recent ruling by the Delhi High Court, the case of Mrishi Marcndey India Ltd Vs Sales Tax Officer has seen significant developments. The court’s decision to restore the matter to the proper officer for adjudication of the Show Cause Notice (SCN) regarding the alleged absence of excess Input Tax Credit (ITC) has raised pertinent legal questions. Let’s delve into the detailed analysis of this judgment to understand its implications.
The petitioner challenged the order dated 21.12.2023, which disposed of the SCN proposing a hefty demand against them under Section 73 of the Central Goods and Services Tax Act, 2017. The crux of the petitioner’s argument rested on their contention that they possessed substantial evidence to refute any excess claim of Input Tax Credit. Moreover, they highlighted the absence of their Authorized Representative during the period in question as a contributing factor to their delayed response.
The court’s scrutiny of the order revealed that it was primarily passed due to the petitioner’s lack of response. However, the petitioner submitted evidence including account statements and invoices to support their claim of not availing Input Tax Credit beyond entitlement. In light of these facts, the court deemed it appropriate to grant the petitioner another opportunity to respond to the SCN.
Consequently, the impugned order was set aside, and the SCN was restored to the file of the proper officer. The petitioner was given a two-week window to furnish a response, following which the Proper Officer was tasked with adjudicating the matter within the prescribed timeframe under Section 75(3) of the Act.
It’s imperative to note that the court refrained from delving into the merits of the contentions raised by either party, thereby maintaining a neutral stance on the matter.
The Delhi High Court’s decision to re-adjudicate the matter underscores the significance of procedural fairness and the right to be heard. By providing the petitioner with an opportunity to present their case afresh, the court has upheld the principles of natural justice. This ruling not only highlights the importance of due process but also reaffirms the judiciary’s commitment to ensuring a fair and equitable resolution of disputes in matters concerning taxation laws.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Petitioner impugns order dated 21.12.2023, whereby the impugned show cause notice dated 26.09.2023 proposing a demand of Rs. 46,41,15,492/- against the petitioner has been disposed of and demand including penalty has been raised against the petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 [hereinafter referred to as, “the Act”].
2. Learned counsel for the petitioner submits that in response to Show Cause Notice dated 26.09.2023, petitioner on 25.10.2023, requested for some time to file a reply. In the response dated 25.10.2023, petitioner contended that it had concrete evidence to support that there was no excess claim of Input Tax Credit, and sought time on the ground that the Authorized Representative of the petitioner who was handling the accounts was not available during the said period.
3. Leaned counsel submits that there is sufficient material available with the petitioner to substantiate that there is no amount due from the petitioner. It is further contended that the GST Registration of the petitioner was cancelled vide order 24.06.2020 and in the said cancellation order, there was “nil” demand raised against the petitioner.
4. Issue notice. Notice is accepted by the learned counsel appearing for the respondent. With the consent of the parties, the petition is taken up for final disposal today.
5. Perusal of the order dated 21.12.2023 shows that the same has been passed solely on the ground that there was no response received from the petitioner. Petitioner has annexed the copies of certain account statements as well as invoices to contend that the petitioner had not availed Input Tax Credit, contrary to its entitlement.
6. Keeping in view the peculiar facts and circumstances of the case, we are of the view that one opportunity should be granted to the petitioner to file a response to the Show Cause Notice. Thereafter, the Show Cause Notice shall be re-adjudicated in accordance with law.
7. In view of the above, the impugned order dated 21.12.2023 is set aside. The Show Cause Notice is restored on the file of proper officer.
8. Petitioner shall file a response to the Show Cause Notice within a period of two weeks from today. Thereafter, the Proper Officer shall adjudicate the Show Cause Notice in accordance with the law within the time prescribed under Section 75 (3) of the Act after giving an opportunity of a personal hearing.
9. It is clarified that this Court has neither considered nor commented on the merits of the contentions of either party. All rights and contentions of the parties are reserved.
10. Petition is disposed of in the above terms.
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