The High Court has deemed it necessary to conduct further examination of the case and has scheduled the next hearing for February 22, 2024
In a recent development, the Gauhati High Court has issued an interim stay on a Show Cause Notice pertaining to the reversal of GST Input Tax Credit (ITC) due to a supplier’s default. The case, involving M/s. Surya Business Private Limited vs. the State of Assam, has been granted interim relief pending further examination.
The high court bench, presided over by Justice Manish Choudhury, observed that the plea contesting the Show Cause Notice requires additional scrutiny. As a result, it has directed that the council refrain from taking any action on the notice until the subsequent listing date.
The Show Cause Notice issued under Section 73(1) read with Section 50 of the Assam GST Act, 2017, called upon the applicant to justify why a GST amount, including interest and penalty, should not be recovered for the period 2018–2019. The notice alleges that the applicant availed excess ITC based on invoices from the supplier, who subsequently defaulted.
The applicant has challenged the validity of the Show Cause Notice, arguing that the ITC was claimed legitimately based on valid tax invoices issued by the supplier, who had duly paid taxes to the authorities.
It is noted that the issuance of the Show Cause Notice follows instructions outlined in Circular No. 183/15/2022, specifically Clause 4.1.1. According to this circular, if the variance between the ITC claimed and that available in FORM GSTR 2A exceeds Rs 5 lakh, the proper officer may request a certificate from a Chartered Accountant (CA) or Cost Accountant (CMA) confirming the authenticity of the transactions.
The Gauhati High Court has deemed it necessary to conduct further examination of the case and has scheduled the next hearing for February 22, 2024.
This decision underscores the importance of thorough examination and adherence to procedural requirements in matters concerning GST ITC reversal, ensuring fair treatment for businesses involved.
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