2025 (2) TMI 355 - HC - GST

Authority must decide textbook tax-exemption and ITC entitlement, allow ITC hearing and documents, extend order period eight weeks

Bombay HC disposed the writ, directing the adjudicating authority to consider the petitioner's contention that textbooks were tax-exempt and whether Input ... Seeking to quash a letter and to restrain the Respondents from proceeding with a SCN - Whether Petitioner should have paid GST on the supply of textbooks, which are typically tax-exempt, as they were part of a composite supply with platform solution services? - HELD THAT:- This Writ Petition is disposed off by directing that when Respondent No. 3 adjudicates the Show Cause Notice, he shall also take into account the contentions of the Petitioner regarding the non-availment of the ITC and what would be the effect thereto. In other words, the adjudicating authority shall also, at the time of adjudicating the Show Cause Notice, also decide whether the Petitioner is entitled to ITC, if they are held liable to pay tax as alleged in the Show Cause Notice. Since the time period to pass an Order on the Show Cause Notice expires on 5th February, 2025, the time to pass the Order extended by a further period of eight weeks from today. Before passing the Order, Respondent No. 3, on the limited aspect of Input Tax Credit, shall also give a hearing to the Petitioner and allow them to file the necessary documents. Petition disposed off. Writ petition challenges Show Cause Notice dated 11 July 2024 and letter dated 2 September 2024; contest centers on whether supply of textbooks (exempt) formed part of a composite supply with platform solution services (taxable as principal supply), and whether Input Tax Credit (ITC) was reversed/not availed in respect of exempt supplies. Petitioner asserted they 'reversed/ did not avail ITC' for books and sought amendment of the SCN to reflect that factual position. Respondent directed Petitioner to the adjudicating authority. Court directed that Respondent No. 3, while adjudicating the SCN, shall also take into account the Petitioner's contentions regarding non-availment of ITC and decide 'whether the Petitioner is entitled to ITC, if they are held liable to pay tax as alleged in the Show Cause Notice.' Time to pass order extended by eight weeks; adjudicating authority must give the Petitioner a hearing and allow filing of necessary documents. All other merits kept open. No costs.