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Case Law Details

Case Name : Orient Electricals and Engineers India P. Ltd. Vs Assistant Commissioner (ST) (Madras High Court)
Appeal Number : W.P. No.15515 of 2024
Date of Judgement/Order : 21/06/2024
Related Assessment Year :
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Orient Electricals and Engineers India P. Ltd. Vs Assistant Commissioner (ST) (Madras High Court)

In a significant ruling, the Madras High Court has remanded the case of Orient Electricals and Engineers India P. Ltd. versus the Assistant Commissioner (ST) for reconsideration. The case revolves around the reversal of Input Tax Credit (ITC) based on credit notes and the procedural fairness extended to the petitioner.

Background of the Case: On August 23, 2023, an order was issued against Orient Electricals and Engineers India P. Ltd., demanding the reversal of ITC to the extent of credit notes issued by the company’s suppliers. The petitioner contested this order on the grounds of not having had a fair chance to present their case, as they were unaware of the show cause notice dated June 27, 2023, which called for the ITC reversal.

Petitioner’s Arguments: The petitioner argued that they were not informed of the show cause notice, which led to their inability to respond in a timely manner. The situation came to their attention only when their banker informed them about a notice of attachment from the Commercial Tax Department for tax recovery. Subsequently, the petitioner appealed to the first appellate authority, making a pre-deposit of 12.5% of the tax demand. However, the appeal was dismissed on grounds of limitation, prompting the filing of the present writ petition. The petitioner’s counsel argued that the suppliers issued credit notes to cancel the initial invoices and that the petitioner did not claim ITC for the value of these credit notes. They contended that, if given an opportunity, they could prove that only eligible ITC was claimed.

Respondent’s Position: The learned Government Advocate, representing the respondent, acknowledged the receipt of the show cause notice and asserted that the petitioner was given a personal hearing before the impugned order was passed. The impugned order was based on the credit notes reflected in the auto-populated GSTR 2A.

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