2023 (8) TMI 1088 - HC - GST

GST Input Tax Credit Dispute: Procedural Fairness Mandates Rehearing with Proper Notice and Security Deposit

Tvl. P.G. Textiles Represented by its Partner Mrs. S. Sofya Versus The Assistant Commissioner (ST), Chennai

SC remanded the case involving a textiles unit's GST input tax credit dispute. The court set aside the original order due to lack of hearing opportunity, ... Violation of principles of natural justice - opportunity of hearing not given to petitioner before issuance of SCN - Availment and utilization of Input Tax Credit during subsequent period - HELD THAT:- Considering the fact the impugned order has been passed without giving the petitioner an opportunity of hearing although the petitioner filed reply within the stipulated time, the impugned order is set aside and the case is remitted back to the respondent. However, the petitioner shall debit a sum of Rs. 50,000/- as a security within a period of 15 days from the date of receipt of a copy of this order. Subject to such compliance, the respondent shall issue a fresh notice of hearing and dispose the case afresh within a period of 30 days thereafter - The amount to be paid by the petitioner pursuant to this order shall be treated as a 'deposit', to be adjusted or appropriated or refunded subject to the final outcome of the fresh proceeding. Petition disposed off. Issues involved:The issues involved in the judgment are related to the petitioner, a textiles unit engaged in the manufacture of knitted fabrics and lungies, who purchased a motor vehicle but did not avail Input Tax Credit. The respondent issued a notice regarding this matter, leading to the impugned order dated 28.06.2023.Details of the Judgment:Issue 1: Availment of Input Tax CreditThe petitioner did not avail Input Tax Credit on the tax paid for the motor vehicle purchased, leading to a notice from the respondent in GST DRC-01 on 21.04.2023. The petitioner filed a reply on 23.06.2023, which was acknowledged by the portal in Form GST DRC-06. The impugned order stated that the petitioner had availed and utilized the Input Tax Credit accrued on the motor vehicle during a subsequent period.Issue 2: Impugned Order and Opportunity of HearingThe impugned order, issued on 28.06.2023, did not provide the petitioner with an opportunity of hearing despite the timely submission of the reply. Due to this, the order was set aside, and the case was remitted back to the respondent. However, the petitioner was required to debit a sum of Rs. 50,000/- as security within 15 days. The respondent was directed to issue a fresh notice of hearing and dispose of the case within 30 days.Issue 3: Treatment of PaymentThe amount to be paid by the petitioner as per the order was to be treated as a 'deposit,' subject to adjustment, appropriation, or refund based on the final outcome of the fresh proceeding. The Writ Petition was disposed of with the specified observations, and no costs were awarded. Connected Writ Miscellaneous Petitions were closed as a consequence of this judgment.