Ramco Cement Limited Vs Deputy Commissioner (ST) (Madras High Court)
In a significant ruling, the Madras High Court has allowed Ramco Cement Limited to contest six issues confirmed in an assessment order dated 28.03.2024. This decision underscores the importance of adhering to the principles of natural justice and ensuring due process in tax proceedings.
Ramco Cement Limited received a show cause notice on 28.12.2023, addressing ten issues. After responding to the notice on 05.02.2024 and attending a personal hearing, an impugned order was issued on 28.03.2024. The order considered the petitioner’s reply and dropped four issues, while six issues were confirmed.
The main contention by Ramco Cement’s counsel was the introduction of two new issues in the final order without prior show cause notice, violating principles of natural justice. These issues included:
- Staff Welfare Expenses: Not addressed in the initial show cause notice.
- Rejection of Input Tax Credit (ITC): Based on sub-section 5 of Section 17 of the applicable GST enactments, also not initially notified.
The counsel also highlighted contradictions in the handling of ITC reversal under Rule 42, where the impugned order treated the sale of second-hand vehicles as taxable supplies, conflicting with the basis of the show cause notice.
SEZ Supplies and Other Contentions
The petitioner argued against the confirmation of tax liability on supplies to SEZs, citing a notification effective from 01.10.2023, which required endorsements on invoices. The petitioner’s reliance on this notification and subsequent submission of endorsed invoices for a significant portion of the tax claim were overlooked in the impugned order.
