In W.P.No.17861 of 2023 -MADR HC- Madras High Court sets aside assessment order under TNGST Act, says input tax credit determination should have been included in the show cause notice itself
Justice Anita Sumanth [15-06-2023]

Read Order: M/s. Hatsun Agro Product Ltd v. The Deputy Commissioner (ST) – II Office of the Joint Commissioner (ST) Large Taxpayers Unit and Ors

Chahat Varma

New Delhi, June 26, 2023: In a recent case, the Madras High Court has set aside an assessment order passed under the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act). The court found that the Assessing Officer (AO) had determined the amount to be reversed based on a comparison of the Input Tax Credit (ITC) claimed under GSTR 3B and GSTR 2B. However, the court held that this determination should have been included in the show cause notice itself, giving M/s. Hatsun Agro Product Ltd. (petitioner) sufficient opportunity to respond and provide necessary details in support of the claim of ITC.

The present case involved the reversal of ITC claimed by the petitioner. The AO deemed the ITC to be ineligible and not rightfully claimed by the petitioner.

The single-judge bench of Justice Anita Sumanth noted that a communication dated 09.09.2022 had outlined the specific manner in which the respondent sought information and supporting particulars, including invoices, from the petitioner. However, the court found it unclear whether the petitioner had provided the requested particulars in the specified manner and whether all the supporting documents had been submitted to the AO.

The court remarked, “Prior to the impugned order of assessment, what was exchanged was only general notices calling for particulars to which the petitioner is seen to have responded, albeit, insufficiently.”

In light of the above observation, the court set aside the impugned order of assessment and instructed that the order should be treated as a show cause notice. The petitioner was instructed to appear on 13th of July, 2023, along with all the required details and supporting documents related to the reversal under the impugned order.