HC Set Aside Order Which Denied ITC on Purchase of Tipper Lorry Without Providing Hearing Opportunity to Assessee

Case Details: Tvl. Devi v. Deputy State Tax Officer-1 - [2024] 162 taxmann.com 212 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• G. Derrick Sam & Adithya Reddy for the Petitioner.
• V. Prashanth Kiran, Govt. Adv. (T.) for the Respondent.

Facts of the Case

The petitioner was engaged in business of dealing in construction material. The department issued show cause notice proposing to deny input tax credit (ITC) on ground that a commercial vehicle was purchased and that such commercial vehicle fell within scope of sub-section (5) of Section 17 of CGST Act, 2017.The petitioner replied to notice by stating that commercial vehicle was purchased in furtherance of business. However, the department passed an order in original and denied ITC. It filed writ petition and contended that the reply was not considered.

High Court Held

The Honorable High Court noted that the relevant invoice had been placed on record and the petitioner had asserted that purchase was in furtherance of business because it was dealer in construction material. The Court noted that no documents were uploaded while filing such reply and therefore, the petitioner failed to substantiate the contention that the purchase was in furtherance of business and outside the scope of sub-section (5) of Section 17 of CGST Act, 2017. However, the interest of justice warranted provision of an opportunity of hearing to petitioner. Therefore, the Court held that the impugned order was liable to be set aside and matter was to be remanded on condition that petitioner shall remit 10% of disputed tax demand.