Gauhati High Court Stays SCN Seeking Reversal Of ITC On Account Of Default At Supplier's End

The Gauhati High Court has granted the interim stay of Show Cause Notice in the case of Surya Business Private Limited, seeking reversal of ITC on account of default at the supplier's end.

The bench of Justice Manish Choudhury has observed that the petition challenging the Show Cause Notice seeking reversal of ITC requires further examination and directed that the department shall not act upon the Show Cause Notice till the next date of listing.

The petitioner/assessee has challenged a Show Cause Notice issued under Section 73(1) read with Section 50 of the Assam GST Act, 2017. The show cause notice called up the petitioner to show cause within 30 days from the date of receipt of the show cause notice as to why an amount of GST should not be recovered from the petitioner, being the input tax credit (ITC) excess claimed for the period 2018–2019 plus interest and penalty. The petitioner has assailed the Show Cause Notice on the ground that the petitioner had availed ITC on valid tax invoices raised by the supplier and had also made payment of taxes to the supplier.

The department submitted that the show cause notice has been issued after considering the instructions contained in Circular No. 183/15/2022 dated December 27, 2022, and more particularly Clause 4.1.1 thereof. As per the circular in case, where the difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the financial year exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the invoices of the supplier have actually been made by the supplier to the registered person and the tax on such supplies has been paid by the supplier in his return in FORM GSTR 3B. Certificates issued by CA or CMA shall contain UDIN.

The court has noted that the matter would require further examination and will list the case on February 22, 2024.

Counsel For Petitioner: Ankit Kanodia

Counsel For Respondent: SC, Finance And Taxation

Case Title: M/S Surya Business Private Limited Versus The State Of Assam

Case No.: Case No. : WP(C)/528/2024

Click Here To Read The Order