M/s.Selvaraj Traders vs The Assistant Commissioner (ST) (ST) [W. P.N o.15570 of 2024]
A writ petition had been filed challenging an order dated 12.09.2023, on the basis that the petitioner was not given a fair opportunity to contest the tax demand. The petitioner, who was involved in the buying and selling of vegetable oil, claims to have purchased a goods vehicle and applied for Input Tax Credit (ITC) in relation to the same. However, the order issued on 12.09.2023 rejected the petitioner’s ITC claim, citing that the purchase falls under sub-section (5) of Section 17 of the relevant GST laws.
The attorney representing the petitioner argued that the acquisition was made to advance the business. Given a chance, he asserted that the petitioner could prove that only eligible Input Tax Credit was utilized. As per instructions, he stated that the petitioner was willing to pay 10% of the contested tax amount as a requirement for reconsideration.
Mrs. K. Vasanthamala, an experienced Government Advocate, acknowledged the receipt of the notice on behalf of the respondent. She emphasized that the principles of natural justice were strictly followed through the issuance of Form ASMT 10, a show cause notice, and reminders for a personal hearing. Additionally, she highlighted that the petitioner’s response dated 21.03.2024 was received after the impugned order and was not acknowledged by the respondent.
Upon review of the impugned order, it was apparent that the tax proposal was related to the incorrect use of ITC for the purchase of a motor vehicle on August 31, 2018. The petitioner stated in the affidavit that this purchase was made to further their business. Considering these facts, it was reasonable and necessary to grant the petitioner an opportunity to dispute the tax claim based on its merits by imposing conditions.
Due to the aforementioned reasons, the order dated 12.09.2023 was overturned with the condition that the petitioner pays 10% of the disputed tax demand within two weeks of receiving a copy of this order. During this period, the petitioner was allowed to respond to the show cause notice. Once the payment was confirmed, the respondent must grant the petitioner a fair chance, including a personal hearing, and then issue a new order within three months of receiving the petitioner’s reply.
To download official order, click here.“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”