Taxpayers Lose Interim Relief Challenge Against ITC Reversal Due to Insufficient Evidence and Procedural Noncompliance with Section 16(4) The SC denied interim relief to the Petitioners challenging ITC reversal, citing lack of substantive evidence and non-compliance with audit requests. The ...
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Taxpayers Lose Interim Relief Challenge Against ITC Reversal Due to Insufficient Evidence and Procedural Noncompliance with Section 16(4)
The SC denied interim relief to the Petitioners challenging ITC reversal, citing lack of substantive evidence and non-compliance with audit requests. The Court emphasized procedural provisions in the CGST Act and found no immediate grounds for intervention. The challenge to Section 16(4) was deemed academic, with the matter listed for further hearing and Respondents permitted to file objection affidavits.
Issues: The issues involved in the judgment are the denial of interim relief to the Petitioners based on apprehension, the contention regarding reversal of Input Tax Credit (ITC), the lack of response to audit requests, and the challenge to the vires of Section 16(4) of the CGST Act.
Interim Relief Denial: The Court refused to grant interim relief to the Petitioners as they approached the Court based solely on apprehension. The Petitioners claimed they were pressured to reverse the ITC for February-2019 and March-2019, but the Respondents denied making any such communication. The Court noted that the Petitioners had not responded to audit requests and had not submitted required documents despite being granted time. It was emphasized that the provisions of the CGST Act provide a procedure for assessment by the Assessing Officer, including the issuance of a Show Cause Notice. The Court found that the Petitioners' avoidance of GST audit and the lack of a Show Cause Notice did not warrant any interim relief.
Challenge to Viability of Section 16(4) of CGST Act: The Petitioners had challenged the vires of Section 16(4) of the CGST Act. A previous Bench had issued notice to the Attorney General of India regarding this challenge. However, the Court noted that adjudication on such prayers seemed academic in the present Petition. The matter was listed for further hearing on a specified date, with the Respondents given liberty to file appropriate Affidavits raising objections on all issues.
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