M/s Jain Cement Udyog (through Proprietor Sh. Sanjay Jain) Vs Central Board of Indirect Taxes And Customs & Anr. (Delhi High Court)
Ex-parte order cannot be sustained when related show cause notice (SCN) is issued on portal post cancellation of GSTN of taxpayer: Delhi HC
M/s Jain Cement Udyog, represented by Proprietor Sh. Sanjay Jain, contested an order by the Delhi High Court dated 04.12.2023. The order disposed of a Show Cause Notice from 25.09.2023, proposing a demand of Rs.7,56,66,476.00. The petition argued against the validity of the order under Section 73 of the Central Goods and Services Tax Act, 2017.
The Show Cause Notice raised concerns regarding under-declaration of output tax, excess claim of Input Tax Credit (ITC), and ITC claimed from cancelled dealers, return defaulters, and tax non-payers. However, the impugned order deemed the demand as ex-parte, citing the taxpayer’s failure to respond despite repeated opportunities provided through the GST portal.
The petitioner’s counsel argued that the GST registration had been cancelled retrospectively, preventing access to the portal. Consequently, the petitioner contended that they were not served with the Show Cause Notice or the subsequent order.
The Court acknowledged that if registration is cancelled retrospectively, access to the portal is restricted. Therefore, it concluded that the ex-parte order solely based on the petitioner’s failure to respond cannot be upheld. The matter was remitted to the Proper Officer for re-adjudication, directing the petitioner to file a reply to the Show Cause Notice within 30 days.
