Order Set Aside: Case Remanded for Reconsideration with New Timelines for Submission and Hearing.

The HC set aside the impugned order dated 28.04.2024, remanding the matter for reconsideration. The petitioner was allowed to submit an additional reply within fifteen days, including documents on goods movement. The respondent was instructed to provide a personal hearing and issue a fresh order within three months. The case was disposed of without costs, and related motions were closed.

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Issues:
Challenging an order in original dated 28.04.2024 on grounds of Input Tax Credit for allegedly ineligible commodities and supplies from cancelled dealers not remitting tax dues.

Analysis:
The petitioner received a show cause notice on 28.12.2023 regarding two issues. The first issue was about claiming Input Tax Credit for allegedly ineligible commodities under Section 17(5) of GST statutes. The second issue concerned claiming ITC for supplies from cancelled dealers who did not pay tax dues. The petitioner responded to the notice on 12.01.2024, providing details and documents related to the supplies from M/s.VK Impex and the payment of taxes by the supplier. However, the impugned order issued on 28.04.2024 did not address the first issue of Input Tax Credit for MS Scrap and raised concerns about the movement of goods without requesting specific documents like lorry receipts or weighment slips.

The petitioner's counsel argued that the impugned order lacked discussion on the first issue of Input Tax Credit for MS Scrap and that the petitioner was not asked to explain the movement of goods. The counsel highlighted that the petitioner had already submitted relevant invoices, e-way bills, and proof of tax payment by the supplier. On the other hand, the Government Advocate referred to Sections 16 and 155 of GST statutes, stating that the burden of proof for claiming Input Tax Credit lies with the taxpayer. Due to the petitioner's alleged failure to provide documents like lorry receipts and weighment slips, the assessing officer confirmed the tax proposal.

Upon reviewing the show cause notice, it was noted that there were two tax proposals: one related to Input Tax Credit for ineligible commodities under Section 17(5) and the other regarding recovery of ITC due to the supplier not paying taxes. The petitioner had responded to both issues, clarifying that the materials procured were used for business purposes and providing evidence of tax payment by the supplier. However, the impugned order did not address the first issue and confirmed the tax proposal for the second issue based on the lack of evidence regarding the movement of goods.

Consequently, the court set aside the impugned order dated 28.04.2024 and remanded the matter for reconsideration. The petitioner was granted the opportunity to submit an additional reply within fifteen days, including all relevant documents related to the movement of goods. The respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months from receiving the petitioner's additional reply. The case was disposed of with no costs incurred, and related motions were closed as a result.

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