Mukesh Kumar Singh Vs Commissioner Goods and Service Tax (Jharkhand High Court)
Jharkhand High Court Quashes GST Orders on Procedural Grounds
Ranchi: The Jharkhand High Court has set aside a tax demand and appellate order against a taxpayer, Mukesh Kumar Singh, citing significant procedural irregularities in the disallowance of Input Tax Credit (ITC). The court found that the tax authorities failed to follow due process, including providing an opportunity for hearing and issuing a reasoned order.
The case stemmed from the financial year 2018-19, where the tax authorities demanded over Rs. 25.53 lakhs, including interest and penalty, from the petitioner. The demand was based solely on the alleged excess ITC claimed in GSTR-3B compared to the auto-populated GSTR-2A data.
The petitioner contended that the initial order was issued without prior notice or information. He argued that the ITC was availed based on valid invoices and records, and a mere mismatch between GSTR-3B and GSTR-2A should not be the sole ground for denial, especially when evidence of the genuine claim exists.
Challenging the primary order, the petitioner filed an appeal. However, he claimed that the appellate authority also failed to provide any opportunity for a hearing or request supporting documents, dismissing the appeal with a standard remark about the lack of valid submissions. The petitioner referred to unnamed case law supporting the argument that GSTR-2A difference alone is insufficient to deny ITC.
Responding to the petition, the tax department maintained that a mismatch existed and the petitioner had not replied to various notices issued. They also argued that the petitioner failed to provide documents proving the genuineness of the ITC claim during the adjudication or appeal process.
Upon reviewing the facts and submissions, the High Court noted that the petitioner had, in fact, uploaded documents, including an online reply (ASMT-11) to a prior notice (ASMT-10), along with the appeal. The court found the department’s assertion that no reply was given to ASMT-10 to be factually incorrect, which it deemed to have vitiated the primary order.
More critically, the court found that the appellate authority’s order was in blatant violation of the Jharkhand Goods and Services Tax Act, 2017. Specifically, the court highlighted non-compliance with Section 107(8), which mandates providing an opportunity of hearing, and Section 107(12), which requires a written order stating points for determination, the decision, and reasons. The court found no evidence of a hearing being granted or that the appellate authority had sought documents from the petitioner.
Based on these procedural lapses, the High Court set aside both the appellate order dated February 28, 2022, and the primary order dated December 15, 2020. The court remitted the matter back to the primary authority with directions to issue a fresh hearing notice, consider the documents already filed by the petitioner (like ASMT-11), allow the petitioner to submit further documents or case law, and pass a fresh, reasoned order in accordance with the law.
The court also directed the respondents to pay costs of Rs. 25,000 to the petitioner within four weeks. The judgment underscores the mandatory nature of procedural fairness in tax adjudication.
FULL TEXT OF THE JUDGMENT/ORDER OF Jharkhand HIGH COURT
