Orders Denying ITC to Be Set Aside Since Assessee Was Not Allowed to Cross Examine Witnesses | HC

Case Details: B. Sivakumar v. State Officer - [2024] 159 taxmann.com 719 (Madras)

Judiciary and Counsel Details

• • C. Saravanan, J.
  • T.K. Bhaskar for the Petitioner. 
  • V. Mahalingam for the Respondent.

Facts of the Case

In the present case, the dispute was related to wrong availing of input tax credit by assessee and the petition had been filed by assessee to quash impugned orders denying ITC. It was contended that bank had put assessee’s mills/factories under lock and seal under provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002.

Since business premises of assessee was under lock and seal by Bank, the records could not be presented before the GST Officials and they visited assessee’s premises with bank officials to obtain related records in his absence but could not find any records and documents. The assessee had also requested GST Officials to permit assessee to cross-examine officers from bank but he was not allowed.

High Court Held

The Honorable High Court noted that despite officials of bank were summoned for cross-examination, assessee was not allowed to cross examine them and if cross-examination was allowed, assessee would have established that all documents were available and would be able to prove that Input Tax Credit were validly availed.

Therefore, the Court held that the impugned orders had been passed in violation of principles of natural justice since assessee was not allowed to cross examine Bank officials who had taken possession of factory. Thus, the order was liable to be set aside and matter was remitted back.