Case Law Details
Sri Uma Plastics Vs Deputy State Tax Officer-2 (Madras High Court)
The case of Sri Uma Plastics vs. Deputy State Tax Officer-2, adjudicated by the Madras High Court, revolves around the contentious issue of Input Tax Credit (ITC) availed on the purchase of a commercial vehicle. The petitioner, engaged in the plastic scrap business, challenges a tax demand order asserting inadequate opportunity to contest the claim.
The crux of the dispute lies in the petitioner’s assertion that the commercial vehicle purchase was legitimate for business purposes, warranting the availing of Input Tax Credit. However, the tax authorities contested this claim, leading to a substantial tax demand of Rs. 4,28,936. The petitioner, feeling aggrieved by the lack of opportunity to present their case effectively, filed a writ petition before the Madras High Court.
Upon examination of the facts, the High Court found merit in the petitioner’s plea regarding the insufficient opportunity to contest the tax demand. The court noted discrepancies in the proceedings leading to the order, including inadequate communication and procedural lapses. Notably, a significant portion of the disputed tax demand was already appropriated from the petitioner’s bank account, further underscoring the urgency of the matter.
In light of these findings, the Madras High Court set aside the original order dated 11.10.2023 and remanded the case for reconsideration. The petitioner was granted the opportunity to submit a detailed reply to the show-cause notice within two weeks, followed by a fair hearing by the tax authorities. The court emphasized the necessity for a thorough review of the case, ensuring the petitioner’s rights are upheld.
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