Abbott Healthcare Pvt. Ltd. Vs Union of India & Ors. (Himachal Pradesh High Court)
Recipient Unit Authorities Cannot Question ISD Credit Distribution Accepted by Jurisdictional ISD Authorities
The petitioner is a leading pharmaceutical MNC. It has its head office at Mumbai. The said office is registered as an “input service distributor”. The ISD distributed credit to the Shimla plant. Similarly; there was a cross charge by Mumbai office to Shimla. The officer at Shimla questioned such credit on the ground that ISD has not correctly distributed the credit. Demand of over Rs.80 crores with interest and penalty was confirmed. Hence; petition came to be filed.
The Hon’ble Himachal Pradesh High Court set aside the order and allowed the petition. It noted: (i) there is a fundamental jurisdictional objection: the ISD distributing credit was registered in Mumbai, whereas the Shimla adjudicating authority proceeded to question and deny such ISD-distributed ITC at the recipient unit; (ii) the petitioner placed on record audit report of the Mumbai ISD by the jurisdictional authorities; which, after detailed verification of records, accepted the correctness of the credit distribution, thereby undermining the very basis of the Shimla proceedings; (iii) the court notes that the Revenue authorities at Shimla has no reply to the said audit report; (iv) notes that the adjudicating authority had failed to address the jurisdictional objection and accordingly; remands the matter back to the adjudicating authority; to pass fresh order; leaving all issues on merits open.
