In a recent judgement by the Delhi High Court, the re-adjudication of GST demand and penalties for the taxpayer has been ordered. The court has set aside the impugned orders dated 24.12.2023 and 28.12.2023, remitting the Show Cause Notices dated 22.09.2023 and 29.09.2023 for further review. Stay tuned for more updates on this significant legal development.
Facts
- The impugned orders dated 24.12.2023 and 28.12.2023 disposed of the Show Cause Notices dated 22.09.2023 and 29.09.2023.
- The orders created a demand of Rs. 5,35,393.00/- and 1,89,65,230.00 against the petitioner, including penalties.
- The petitioner has challenged these orders contesting the demand and penalties imposed.
- ASMT10 was issued to the taxpayer on 13.04.2023 at the GST portal.
- The Show Cause Notice dated 22.09.2023 was vague and unreasoned, mentioning discrepancies in tax liabilities and ITC claims.
- The taxpayer availed Input Tax Credit from a firm with NIL outward supplies, currently Cancelled Suo-moto.
- The taxpayer’s reply was found unsatisfactory as figures did not match GST Portal records and lacked supporting evidence.
- Taxpayer did not file a satisfactory reply/explanation or pay due tax and interest voluntarily.
- Proceedings under Section 73 of Delhi Goods and Services Act, 2017 were initiated due to non-compliance.
- Another Show Cause Notice was issued on 29.09.2023, to which the taxpayer responded with a plain reply lacking proper calculations, reconciliation, and relevant documents.
Analysis
- The taxpayer claimed excess ITC for Rs. 210134/- and did not reply to the query with proper calculations/reconciliation and relevant documents.
- ITC claimed from cancelled dealers, return defaulters, and tax non-payers was examined.
- Input Tax Credit was availed from suppliers whose registrations were cancelled for various reasons such as non-functioning/not existing at the principal place of business, fraud, wilful misstatement, suppression of facts, and non-filing of returns for a continuous period of six months.
- The purchase chain of certain suppliers appeared suspicious with significant discrepancies between inward supplies in GSTR 2A returns and outward supplies in GSTR 1 & GSTR 3B returns.
- The reply submitted by the taxpayer was considered a plain reply lacking proper calculations, reconciliation, and relevant documents.
- The Proper Officer could have requested further details from the Petitioner if deemed necessary.
- The court did not analyze the merits of the arguments presented by either party.
- No opportunity was provided to the Petitioner to clarify or provide additional documents.
Decision
- The Petition is disposed of with certain terms.
- The Petitioner has 30 days to file a further reply to the Show Cause Notice.
- All rights and contentions of parties are reserved.
- The Proper Officer will re-adjudicate the Show Cause Notice in accordance with the law.
- Impugned orders dated 24.12.2023 and 28.12.2023 are set aside.
- The Show Cause Notices dated 22.09.2023 and 29.09.2023 are remitted for re-adjudication.
Case Title: M/S. JINDAL TRADING CO. THROUGH ITS PROPRIETOR SH. SURESH JINDAL Vs. UNION OF INDIA AND ORS. (2024:DHC:4431-DB)
Case Number: W.P.(C)-5966/2024
