TaxTMI 
TaxTMI 
2026 (6) TMI 436
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....e period from July, 2017 to March, 2019 on the petitioner is confirmed. By the said order, interest at the applicable rate under Section 50 of the CGST Act, 2017 and the corresponding provisions of the SGST Act and the IGST Act was also directed to be recovered for delayed payment of tax and a penalty of Rs. 78,70,952/- was imposed under Section 74(1) read with Section 122 of the CGST Act, 2017 and Section 20 of the IGST Act, 2017. The petitioner has also put to challenge the Order-in-Appeal No. GAPPL/ADC/GSTP/2080/2024-APPEAL-O/O COMMR-CGSTAPPL- GUWAHATI dated 14.02.2025 passed by the Additional Commissioner (Appeals), CGST, Central Excise and Customs, Guwahati, whereby the appeal against the Order-in-Original dated 19.02.2024, filed by the petitioner, has been rejected. 3. Having considered that the similar matter has already been decided by a Division Bench of this Court and as agreed to by the learned counsel for the parties, this writ petition is heard and dispose of at the motion stage itself. 4. The petitioner No. 2 is the proprietor of M/s Metal Syndicate, petitioner No. 1 herein, having its registered office at Kathat Road, Silchar, Assam. It is the case of the petit....
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....scribed thereunder. Subsequently, the respondent authority issued a Show Cause Notice dated 28.07.2022 for the assessment year May, 2018 to March, 2019 alleging that the petitioner had wrongly availed and utilized the ITC of Rs. 78,70,952/- in violation Section 16(2)(a)(b) of the CGST Act, 2017 without actual receipt of goods and thereby proposed recovery of tax along with interest and penalty. 9. It is the case of the petitioner that despite submission of all relevant documents and repeated request, no effective opportunity of hearing was granted and no notice was uploaded on the GST portal and were only manually served on the petitioner beyond the date of hearing. Consequently, the adjudicating authority proceeded to pass the impugned Order-in-Original dated 19.02.2024 without affording a meaningful opportunity of hearing and without issuance of Form GST DRC-07. The petitioner further contends that the sole basis for denial of ITC is the alleged failure of the suppliers to discharge their tax liability, a circumstance which is entirely beyond the control of the petitioner. The petitioner had paid full tax to the supplier and he had no involvement on the affairs of the said sup....
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....ith law. 13. I have considered the submissions of learned counsel for the parties and perused the materials available on record. 14. The Division Bench of this Court in National Plasto Moulding (supra) has examined and considered the issue as regards the input tax credit and failure of the selling dealer to deposit tax collected from the purchasing dealer and upon consideration of the law laid down by the Delhi High Court in On Quest Merchandising India Pvt. Ltd. (supra) has held that for failure of the selling dealer for depositing tax, purchasing dealer cannot be punished. In other words, a purchasing dealer cannot be punished for the act of selling dealer in case the selling dealer had failed to deposed the tax collected by it. The relevant paragraphs of the judgment are reproduced herein below: "4. Before the Delhi High Court, the validity of Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 was under challenge. The said provisions of the Delhi Value Added Tax Act are analogous to the provisions of Sections 16(2)(c) and 16(2)(d) of the Assam Goods and Services Tax Act, 2017 as well as Sections 16(2)(c) and 16(2)(d) of the Central Goods and Services Tax Act, ....
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....nstitution. 54. The result of such reading down would be that the Department is precluded from invoking section 9(2)(g) of the DVAT to deny ITC to a purchasing dealer who has bona fide entered into a purchase transaction with a registered selling dealer who has issued a tax invoice reflecting the TIN number. In the event that the selling dealer has failed to deposit the tax collected by him from the purchasing dealer, the remedy for the Department would be to proceed against the defaulting selling dealer to recover such tax and not deny the purchasing dealer the ITC. Where, however, the Department is able to come across material to show that the purchasing dealer and the selling dealer acted in collusion then the Department can proceed under section 40A of the DVAT Act." 6. The Hon'ble Supreme Court has dismissed the SLP preferred against the said judgment by passing the following order:- "On hearing learned Additional Solicitor General appearing for the petitioner, we are not inclined to interfere with the impugned order. The special leave petition is dismissed. Learned Additional Solicitor General, however, submits that a batch of petitions wer....