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Case Law Details

Case Name : Surya Business Private Limited Vs State of Assam (Gauhati High Court)
Appeal Number : WP(C)/528/2024
Date of Judgement/Order : 05/02/2024
Related Assessment Year :

Surya Business Private Limited Vs State of Assam (Gauhati High Court)

Introduction: In a recent development, the Gauhati High Court has granted an interim stay on a show cause notice issued to Surya Business Private Limited under the Assam GST Act, 2017. The notice sought the reversal of Input Tax Credit (ITC) amounting to Rs. 27,25,503/- for the financial year 2018-2019, along with interest and penalty.

Detailed Analysis: The show cause notice, dated 11.01.2024, was issued under Section 73 r/w Section 50 of the Assam GST Act, 2017. It demanded an explanation from Surya Business Private Limited within 30 days regarding the claimed excess Input Tax Credit (ITC) amount. The petitioner contested the notice, arguing that they had availed ITC based on valid tax invoices from the supplier and had duly paid taxes to the supplier.

Citing precedents, including a decision by the Hon’ble Supreme Court of India in Union of India vs. Bharti Airtel Limited and others, the petitioner sought relief from the Gauhati High Court. Additionally, reference was made to a decision of the Hon’ble Calcutta High Court in the case of Suncraft Energy Private Limited vs. The Assistant Commissioner, State Tax, highlighting similar circumstances.

On the other hand, the learned Standing Counsel, Finance and Taxation Department, defended the issuance of the show cause notice, stating that it was in accordance with Circular no. 183/15/2022, particularly Clause 4.1.1.

However, considering the complexities of the matter, the court decided to further examine the issue and listed the case for 22.02.2024. In the interim, the court directed that the respondents shall not act upon the impugned show cause notice dated 11.01.2024 until the next date of listing.

Conclusion: The interim stay granted by the Gauhati High Court provides temporary relief to Surya Business Private Limited in the face of the show cause notice seeking the reversal of Input Tax Credit (ITC). The court’s decision to further examine the matter underscores the importance of procedural fairness and thorough evaluation in tax disputes. The final outcome of the case will determine the fate of the disputed ITC amount and will have implications for similar cases in the future.

FULL TEXT OF THE JUDGMENT/ORDER OF GAUHATI HIGH COURT

Heard Mr. A. Kanodia, learned counsel for the petitioner and Mr. B. Choudhury, learned Standing Counsel, Finance and Taxation Department for the respondent nos. 1 – 3.

Gauhati HC Grants Interim Stay on ITC Reversal Notice Surya Business Pvt Ltd Case

2. The petitioner in this writ petition has challenged a Show Cause Notice dated 11.01.2024 issued under Section 73[1] r/w Section 50 of the Assam GST Act, 2017, whereby the petitioner was called up to show cause within 30 [thirty] days from the date of receipt of Show Cause Notice as to why an amount of Rs. 27,25,503/- [SGST Rs. 11,26,329.00, CGST Rs. 11,26,329.00 and IGST Rs. 4,72,845.00] should not be recovered from the petitioner being the Input Tax Credit [ITC] excess claimed for the period : 2018-2019 plus interest and penalty. The petitioner has assailed the Show Cause Notice on the ground that the petitioner had availed ITC on valid tax invoices raised by the supplier and had also made payment of taxes to the supplier. Reliance has been held in the decision of the Hon’ble Supreme Court of India in Union of India vs. Bharti Airtel Limited and others, decided on 28.10.2021, as well as a decision of the Hon’ble Calcutta High Court in the case of Suncraft Energy Private Limited and another vs. The Assistant Commissioner, State Tax, Ballygunge Charge and others [Page 112 – 117].

3. On the other hand, Mr. Choudhury, learned Standing Counsel, Finance and Taxation Department has submitted that the Show Cause Notice has been issued after considering the Instructions contained in Circular no. 183/15/2022 dated 27.12.2022, more particularly, Clause 4.1.1 thereof.

4. The matter would require further examination.

5. As sought by the learned counsel for the parties, list the case on 22.02.2024.

6. Having regard to the submissions of the learned counsel for the petitioner, it is observed that the respondents shall not act upon the impugned Show Cause Notice dated 11.01.2024 till the next date of listing.

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