Admitted wrongful input tax credit and interest demand defeated objections on notice, hearing, and natural justice.

Where the taxpayer admitted wrongful availment and utilisation of input tax credit, the Patna HC declined to quash the demand and consequential notice on objections as to service, digital signature, and personal hearing. The Court held that the grievance regarding service did not survive once the reply had been filed, and the challenge under the personal hearing requirement was untenable because the authority had considered that reply. As the demand related only to interest on the admitted wrongful credit and no penalty was imposed, no writ relief was warranted.

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Issues: Whether the demand order and consequential notice were liable to be quashed for want of proper service, absence of digital signature, violation of the requirement of personal hearing, and breach of natural justice.

Analysis: The petitioner had already submitted a reply to the show cause notice and, in that reply, accepted that input tax credit had been wrongly availed and utilised. The impugned demand was founded on that admission. In those circumstances, the Court held that the grievance regarding service of notice did not survive for adjudication, and the challenge based on Section 75(4) was unfounded because the case was not one where the authority acted without considering the reply. The Court also noted that the order related only to interest on wrongly availed credit under Section 50(3), and that no penalty had been imposed.

Conclusion: The challenge to the demand failed, and the writ petition was not entitled to relief.

Final Conclusion: The Court declined to interfere with the tax demand and upheld the action of the proper officer.

Ratio Decidendi: Where the taxpayer has admitted wrongful availment of input tax credit and the demand is confined to interest on that admitted liability, the absence-based objections to notice and personal hearing do not warrant judicial interference in writ jurisdiction.

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