D.R. Patnaik Vs Commissioner (Orissa High Court)
Orissa High Court has quashed a Goods and Services Tax (GST) order that raised a demand of over Rs. 10 crore and imposed a penalty on D.R. Patnaik for alleged excess input tax credit (ITC) availment. The court’s decision was primarily based on the grounds of a violation of natural justice principles, as the adjudicating authority failed to consider the detailed reply and supporting documents submitted by the taxpayer.
The petitioner had been accused of availing excess ITC of Rs. 10,16,95,448 for the financial year 2020-21, based on alleged differences between ITC claimed in Form GSTR-3B and ITC reflected in Form GSTR-2A. In response to the show-cause notice (SCN) dated November 21, 2024, the petitioner submitted a comprehensive reply along with a reconciliation statement and supporting documents via the GST web-portal on December 20, 2024, in Form GST DRC-06. This reply provided explanations for the discrepancies and included relevant documents for verification. The petitioner also opted for a personal hearing.
However, the Order-in-Original dated February 20, 2025, passed by the Additional Commissioner, GST & Central Excise Commissionerate, Rourkela, conspicuously stated that “the Noticee did not submit their defense reply till date.” This indicated that the adjudicating authority proceeded under the misconception that no response had been filed, despite the online submission. The petitioner’s counsel, Mr. Rudra Prasad Kar, argued that this non-consideration of the reply amounted to a blatant violation of natural justice, rendering the demand unsustainable. He cited the Delhi High Court’s judgment in Samsung India Electronics PVT LTD vs. Union of India and others (W.P.(C) No.7351 of 2024), which similarly set aside an order and remitted the matter for fresh adjudication due to non-consideration of the taxpayer’s submissions in an ITC mismatch case.
