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Liability to pay GST can’t be levied for unrequested legal documents: Madras HC
The Madras High Court in a case held that the GST obligation confirmed for non-providing of documents not asked in the SCN ( Show Cause Notice ) is not valid. The court remanded the case for reconsideration.
In the impugned order, there are no findings in respect of the first issue. As regards the second issue, the tax proposal was confirmed on the ground that the petitioner did not establish movement of goods by producing lorry receipts, weighment slips and payments made to the supplier. None of these documents were called for in the show cause notice which proceeded on a completely different basis. Therefore, the impugned order cannot be sustained.
The taxpayer Slitina Metal Sales LLP, argued that the GST order was on various grounds. The taxpayer obtained a SCN, addressing two major issues.The initial problem related to the claim of the ITC on the commodities allegedly not eligible under sub-section (5) of Section 17 of the applicable GST statutes. The second issue is the ITC claims for the supplies from the cancelled dealers who did not remit the tax dues.
The assessee submitted a detailed reply, including invoices and e-way bills related to supplies from M/s. VK Impex, along with proof of the supplier’s GST return filings. The assessee said that MS Scrap was obtained from three sources for commercial reasons.The impugned order was unable to address the first problem related to the ITC claims on MS scrap, furnished via the legal representative of Slitina Metal.The counsel for the second issue remarked that the taxpayer was not required to provide the information on the goods movement. The SCN said that the supplier registration was refused and taxes were not paid, however, the taxpayer has furnished the tax payment proof via the supplier. The counsel of the GST department argued that as per GST Sections 16 and 155, the evidence burden for the ITC rests with the assessee.
Since the petitioner did not provide additional documents like lorry receipts and weighment slips, the assessing officer was forced to sustain the tax proposal. The High court reviewed the show cause notice and determined that it addressed two issues: ITC on allegedly ineligible commodities under Section 17(5) of GST law and ITC claims related to a supplier who had not paid taxes. Further noted that the assessee responded to both concerns, asserting that materials under HSN Code 7204 were used in business and did not fall within Section 17(5).
Additionally, the assessee demonstrated that the supplier, despite having a cancelled registration, had paid taxes, supported by relevant invoices, e-way bills, and returns. The high court observed that the impugned order confirmed the tax proposal on the second issue, citing the lack of evidence for the movement of goods, such as lorry receipts and weighment slips.The court said that these documents were not required by the original GST show cause notice, which covered different issues.The matter was remanded back for reconsideration without any pre-deposit and permitted the assessee to submit an additional reply with all relevant documents related to the movement of goods within fifteen days of receiving the court’s order. Accordingly, the department was instructed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months from receiving the additional reply.
The Copy order is as under:
From,
Krishnkant Jakhotia
Mobile No. :- 9422507911
Email Id :- taxtalknew@gmail.com