Lakshmi Road And Infra Vs Deputy State Tax Officer-2 (Madras High Court)
Conclusion: An assessment order demanding reversal of ITC was passed with a complete lack of application of mind and failure to consider the taxpayer’s detailed submissions, therefore, the impugned order was set aside and remanded back to authorities for fresh consideration.
Held: Assessee challenged an assessment order in which GST department had demanded reversal of input tax credit (ITC) amounting to ₹12,13,375. The dispute was based on discrepancies between GSTR-1 and GSTR-9 filings, as well as claims of excess ITC for the financial year 2019–2020. Although a show cause notice was issued and personal hearings were scheduled, assessee filed comprehensive replies supported by documentation, stating medical reasons for inability to attend in person. However, without engaging with the replies or providing a meaningful hearing, the GST officer proceeded to pass the assessment order with a one-line rejection of the taxpayer’s reply and proceeded to debit the ITC directly from the electronic credit ledger. It was held that the order clearly showed that authorities had passed the same without any application of mind, for the reason that the respondent simply rejected assessee’s reply by stating that “Verified the reply details to Your Reply not accepted”. No doubt, an opportunity of personal hearing was provided to assessee on two occasions, since assessee’s consultant was unwell at that point of time, they could not appear before the authorities. Since, assessee was not provided with an opportunity of personal hearing to put forth their contention, this Court feels that it would be appropriate to set aside the impugned order and remand back the same to authorities for fresh consideration.
