M/S Iti LTD vs. The Union Of INDIA And 6 Ors

Held

The Court held that the impugned order dated 19.11.2024, passed by the Additional Commissioner, Dimapur, CGST Division, was to be set aside. The Court reasoned that while the petitioner's core grievance regarding input tax credit was substantially resolved by the amendment to Section 16(5) of the CGST Act, the order was passed without affording the petitioner an adequate opportunity of hearing on other demands. Both parties agreed to a remittance. Therefore, the Court decided to remit the matter back to the respondent no. 7 for a fresh adjudication. The respondent was directed to decide the matter afresh in accordance with the provisions of Section 16 of the CGST Act, as amended, and to provide an opportunity of hearing to the petitioner. The decision was to be made within a period of two months from the date of production of a certified copy of the order. No issue was expressly left undecided.

Facts

M/s ITI Ltd (the petitioner) filed a writ petition before the Gauhati High Court challenging an order dated 19.11.2024 passed by the Additional Commissioner, Dimapur, CGST Division (respondent no. 7). The petitioner's primary grievance related to the availment of input tax credit. While the petitioner acknowledged that the recent insertion of sub-section (5) in Section 16 of the CGST Act by the Finance Act, 2024, largely resolved their input tax credit issue, they contended that the impugned order included other demands passed without providing them an opportunity of hearing. The petitioner sought a remittance of the matter back to the authority for a fresh decision after affording them a hearing.

Key Issues

1. Whether the impugned order dated 19.11.2024, passed by the Additional Commissioner, Dimapur, CGST Division, is liable to be set aside for having been passed without providing an opportunity of hearing to the petitioner, contrary to the principles of natural justice and the provisions of the CGST Act? Petitioner's Contention: The petitioner argued that the impugned order was passed without granting them a proper opportunity of hearing, particularly concerning certain demands other than those related to input tax credit. They submitted that the recent amendment to Section 16(5) of the CGST Act had addressed their core grievance regarding input tax credit, but the procedural defect of lack of hearing persisted for other demands. They requested the Court to remit the matter for a fresh adjudication after providing a hearing. Revenue's Contention: The respondents, represented by their counsel, acknowledged receipt of instructions and agreed that the matter could be remitted back to the concerned authority for a fresh decision. They also agreed that the decision should be made in accordance with the provisions of the CGST Act, including the newly introduced amendment in Section 16(5).