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of <h1>HC quashes order on wrongful input tax credit for motor vehicle; case sent back for fresh review under GST rules</h1> <h3>M/s. Sri Arbutham Printers, represented by its Proprietor S. Duraipandi Versus The Deputy State Tax Officer (ST), Madurai.</h3> The HC quashed the impugned order concerning wrongful availment of input tax credit on a motor vehicle, noting the petitioner had reversed the credit in ... Wrongful availment of input tax credit on motor vehichle (car) - reversal of the credit in GSTR-3B, on coming of its knowledge - It is the case of the petitioner that despite having reversed the credit in GSTR-3B dated 21.04.2021 for the month of March, the impugned order has been passed. HELD THAT:- Having considered the submissions made by the learned counsel for the petitioner and the learned counsel for the respondents, this Writ Petition is disposed of at the time of admission. The petitioner deserves a chance to explain the case considering the fact that the petitioner had reversed the input tax credit, in the GSTR 3B, dated 21.04.2021 filed for the period March 2021, which was wrongly availed during December, 2020 on purchasing of the car by the petitioner. The impugned order shall stand quashed and the case is remitted back to the respondents to pass a fresh order. Impugned order stands quashed shall be treated as addendum to the show cause notice dated 08.02.2024 issued in Form GST DRC 01 - Petition disposed off. The Madras High Court, in a writ petition disposed of at admission, addressed the issue of the petitioner wrongly availing input tax credit on a motor vehicle purchased in December 2020. Although the petitioner reversed the input tax credit in the GSTR-3B return filed for March 2021, the impugned assessment order dated 15.02.2025 (assessment year 2020-2021) was passed pursuant to a notice under Form GST DRC 01 dated 08.02.2024, demanding tax, penalty, and interest. The petitioner had not replied to the notice. The Court noted the respondent's submission that the petitioner had an alternative remedy by way of appeal but emphasized the petitioner's right to be heard given the reversal of credit. The Court quashed the impugned order and remitted the matter to the respondents to pass a fresh order on merits, treating the quashing as an addendum to the show cause notice. The petitioner was directed to file a reply within 30 days of receiving the order copy, failing which the respondents may proceed as if the writ petition was dismissed. In sum, the Court held: the impugned order 'shall stand quashed' and the case is remitted for fresh consideration, ensuring procedural fairness given the reversal of input tax credit by the petitioner.
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