Show cause notice under section 75
Case Title | M/s AG Enterprises (Prop. Abhishek Gumbher) Vs Commissioner of GST , New Delhi |
Court | Delhi High Court |
Honorable Judges | Justice Rajiv Shakdher |
Citation | 2022 (7) GSTPanacea 232 HC Delhi W.P.A. 9629 of 2022 |
Judgement Date | 06-July-2022 |
Council for Petitioner | Chinmaya Seth |
Council for UOI | |
Council for State | Anuj Aggrawal Ayushi Bansal Sanyam Suri |
Favour | Assessee |
Section | Section 75, 73 and 74 of GST along with Rule 142 of Rules |
The Delhi High Court bench of Justice Rajiv Shakdher and Tara Vitats Ganju has held that the Input Tax refund claim was rejected on the ground that it was founded on forged ITC, the petitioner would be liable to pay tax, interest and perhaps also penalty, in the event the adjudication order is sustained.
FACTS OF THE CASE
The petitioner has requested to refund the claim of tax of Rs. 12.71 Lakh which was rejected by the tax officer stating that refund is claimed on forged ITC and issued a demand notice for payment of tax along with interest and penalty thereon. The appeal has been lodged by the petitioner and the adjudication order has also been passed in the same aspect.
The council of respondent said that the impugned order demand notice has been issue to protect the interest of revenue. The demand notice has been issued under section 73(5) of CGST and rule 142(2A) of GST Rule.
This matter has also been listed on the court first time dated 29th June 22 and court issued instant writ and placed the matter before roster bench today.
Show cause notice under section 75
COURT HELD
Considering the facts as recorded, it is observed that counter affidavit has not been filed in the matter hence the stand of respondent is articulated.
It is clear that once the refund of petitioner is rejected on the ground that it is on the basis of forged ITC, the petitioner would be liable to pay tax, penalty, in the event ,the adjudication order is sustained. But the fact here is appeal has been preferred by the petitioner and is pending in adjudication, hence at this stage the show cause notice is premature.
Hence when the appeal is dismissed , it would then open to respondent to take recourse of Section 75 of the Act.
Hence the demand notice is set aside.
Show cause notice under section 75
ANALYSIS OF THE JUDGEMENT
As Taxpayer has fulfilled all the conditions relevant to the GST Laws the demand notice under section 75 cannot be issued when the appeal is under adjudication.
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M/s AG Enterprises (Prop. Abhishek Gumbher)
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