A recent court case where a company (petitioner) challenged a demand notice issued by the government for claiming excess Input Tax Credit (ITC) under the Central Goods and Services Tax Act (CGST Act).

Background:

• The company received a show cause notice (SCN) demanding Rs. 9,04,200/- for excess ITC claimed.
• The SCN mentioned an Annexure-B containing details of the alleged excess claim, but the company never received a copy.
• The company requested a copy of Annexure-B to file a reply but never received it.

Company's Argument:

• The company argued they couldn't respond to the SCN properly because they never received the Annexure-B mentioned in the notice.
• Without this information, they couldn't prepare a proper defense.

Government's Argument:

• The government claimed there was no separate Annexure-B.
• They argued the details were included in a table within the SCN itself.
• The company failed to respond to the SCN despite receiving multiple reminders.

Court's Decision:

• The court sided with the company, highlighting the following:
  • The SCN explicitly mentioned an Annexure-B that the company never received.
  • This lack of information prevented the company from filing a proper response.
• The court set aside the demand order and directed the authorities to:
  • Re-issue the SCN without any mention of Annexure-B.
  • Grant the company a fresh opportunity to respond within two weeks.
  • Hold a personal hearing before passing a new order.

Case Law-Shree Padma Industries Versus Union of India

Citation-2024 TAXONATION 1036 (DELHI)

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