Case Title | LC Infra Projects Pvt. Ltd. vs Union of India |
Court | Karnataka High Court |
Honorable Judges | JUSTICE S.SIJJAIGHA |
Citation | 2019 (07) GSTPanacea 11 HC Karnataka WRIT PETITION No.2887G OF 2019 (T-RES) |
Judgment Date | 22-July-2019 |
The petitioner in this case has sought several reliefs through their petition. Firstly, they request a writ declaring Section 50(1) of the Central Goods and Service Tax (CGST) Act, 2017, and Section 50(1) of the Karnataka Goods and Services Tax, 2017, unconstitutional to the extent that it imposes the burden of interest on Input Tax Credit. This implies that they believe the imposition of interest on Input Tax Credit under these sections is unjust or illegal.
Secondly, they seek a writ, order, or direction to quash an email dated 04.03.2019 (referred to as Annexure-I) which demands payments. This suggests that the petitioner contests the validity or legality of the demand for payments made through this email.
Thirdly, they request a writ, order, or direction to quash a letter dated 07.05.2019 (referred to as Annexure-L) addressed to the Indian Overseas Bank, bearing No.V/15/i6/2019 GST Adjn-631/19, which attaches the petitioner’s account. This indicates that the petitioner disputes the legality or validity of this letter, which involves attaching their bank account.
It’s noteworthy that the petitioner explicitly states that they are not pursuing Relief No. 1, but they reserve all contentions raised regarding it for future consideration, keeping it open for further arguments or legal proceedings. This suggests that while they’re not currently pursuing this specific relief, they may revisit it later or use it as a basis for future legal actions.
The petitioner in this case is contesting actions taken by the respondents regarding the Tax Credit for the Goods and Services Tax (GST) paid by subcontractors when filing their GST returns. The issue arose because some subcontractors failed to upload their invoices and file their returns, leading to a mismatch in Input Tax Credit (ITC) entitlement for the petitioner.
The third respondent contacted the petitioner via email to inquire about the ITC availed. They claimed there was an excess availing of ITC, implicating the petitioner in a tax penalty. However, the petitioner argued that the differential ITC was not their responsibility but rather related to tax penalties concerning subcontractors.
Despite this, the respondents proceeded to demand payment from the petitioner, issuing a Demand Notice totaling Rs.13,63,864/- for tax and Rs.81,29,684/- for interest. Moreover, the third respondent sought to attach the petitioner’s bank account to recover the alleged dues.
In response, the petitioner has approached the court, challenging the respondents’ actions. They argue that the quantification of interest and the attachment of the bank account were conducted without proper procedure, notably without issuing a Show Cause Notice as mandated under Section 73 of the Act.
The petitioner, represented by counsel, brings forth a plea regarding the mandatory requirement of issuing a show cause notice before quantifying interest and attaching their bank account. They argue that the orders in question, listed in Annexures J and N, should be invalidated due to this non-compliance.
The petitioner’s counsel highlights that the Revenue, in response, acknowledges the absence of a notice as mandated under Section 73 of the Act. No such notice was issued to the petitioner to provide them with an opportunity to present their case before the interest amount was determined and their bank account was attached.
This failure to adhere to procedural requirements raises fundamental concerns about due process and fair treatment. The petitioner contends that the absence of a show cause notice deprived them of the opportunity to contest the quantification of interest and the subsequent attachment of their bank account.
In light of these arguments and the acknowledgment by the Revenue regarding the lack of proper notice, the petitioner urges the court to set aside the impugned orders. They assert that such procedural lapses undermine the integrity of the proceedings and violate the petitioner’s rights.
Overall, the petitioner seeks relief from the court, emphasizing the importance of procedural fairness and adherence to legal requirements in matters concerning the quantification of interest and the attachment of assets.
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