Adam Smith Commodities PVT. LTD. Through Its Director Ashish Madan vs. The Commissioner Of Delhi Goods And Services Tax
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The Petitioner challenged an order raising demands for tax on outward supplies and excess Input Tax Credit (ITC). The Petitioner argued that their reply was not considered and no personal hearing was granted.
Held
The Court found that the Petitioner's specific issues raised in their reply were not considered in the impugned order. Consequently, the impugned order was set aside.
Key Issues
Whether the Petitioner was denied a personal hearing and if their reply was adequately considered before passing the impugned order.
Sections Cited
Rule 42, Rule 43
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 22.05.2025
This hearing has been done through hybrid mode.
The present petition has been filed on behalf of the Petitioner under Article 226 of the Constitution of India, inter alia, assailing the order dated 27th February, 2025 passed by the office of Sales Tax Officer Class II/AVATO (hereinafter, the ‘Sales Tax Officer’) pursuant to the Show Cause Notice dated 26th November, 2024 issued by the Sales Tax Office.
Vide the impugned order, various demands have been raised qua the Petitioner, in respect of tax on outward supplies, excess Input Tax Credit on account of non-reconciliation of information, etc.
Mr. Jain, ld. Counsel submits that a reply was filed by the Petitioner on 24th February, 2025, however, no personal hearing was held and the main issue in respect of taxable and exempt supplies has not even been considered in the impugned order. The reply of the Petitioner is set out below: This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:40:37
“We, Adam Smith Commodities Private Limited (herein referred as ‘the Company’) is registered with your good-office vide GST no. 07AAMCA0036D1Z6 having registered principal place of business at 8th Floor, Commercial Tower, Hotel Le Meridien, Windsor Place, Janpath, New Delhi, Central Delhi, Delhi, 110001. The Company is in receipt of the captioned notice, whereby your good office has asked for information for FY 2020-2021. (Hereinafter referred as ‘relevant period’). In response to the same we are submitting the below response.
The tax on outward supplies under declared on reconciliation of data in GSTR-09 Basis the notice issued, office of your good self has noticed that the company has short paid liability on outward supplies amounting to INR 20,000. In response to the same we would like to submit that the company has already paid requisite taxes via DRC 03. The copy of DRC 03 is enclosed (ARN 4D070821021139A dated 27 August 2021) 2 The excess input tax credit (ITC) claimed on account of non-reconciliation of information The goodself has contended in the notice that the noticee has underre versed the Input Tax Credit on exempt supplies as per Rule 42 & 43 of the CGST Rules, 2017 According to Rules 42 and 43 of the CGST Rules, 2017, the Common Input Tax Credit (ITC) refers to ITC for inputs or input services that are partially used for making taxable supplies, including zero-rated supplies, and partially for making exempt supplies The noticee wishes to submit that they deal in both taxable and exempt supplies. The Company itself does not avail any ITC which is pertaining to the Exempt Business, as it is more of a trading line of business, where buy from the manufacturer and directly ship to the Customer. The calculated ITC reversal on exempt supplies as per notice is incorrect as it considers the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:40:37
entire input tax credit as common Office. The noticee has correctly availed ITC and therefore, there is no outstanding liability to be paid concerning this matter, in accordance with the notice. In light of the submissions made above, it is most humbly prayed before your goodself to set aside the impugned SCN and drop the legal proceedings in this context Should your good-self require any further document(s} information, we shall be glad to provide the sane”
On a perusal of the said reply, it is observed that very specific issues have been raised by the Petitioner, however, the same were not considered as the impugned order merely records that the reply is unsatisfactory.
Under these circumstances, the impugned order is set aside. Let a personal hearing be afforded to the Petitioner. Notice of the same be issued on the following email address and mobile no.: o Email ID: rajeshroshanjain@gmail.com, infotax@rediffmail.com o Mobile No.: 9810042928
After affording a personal hearing to the Petitioner, the Adjudicating Authority shall pass a reasoned order in accordance with law.
The petition is disposed of in these terms. Pending application(s), if any, are also disposed of. PRATHIBA M. SINGH, J. RAJNEESH KUMAR GUPTA, J. MAY 22, 2025 dj/rks This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:40:37
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.