Ms Rajasthan Marbles Through Its Proprietor Karta Namely Mr Vishnu Dutta Goyal vs. The Commissioner Central Goods And Services Tax

Held

The Court held that the letter dated September 21, 2020, was neither a demand nor a show-cause notice. It was clarified by the Revenue, and accepted by the petitioner, as a pre-show cause intimation. The Court found that the issue raised by the petitioner regarding this letter did not require adjudication at that stage. The writ petition was disposed of, granting the petitioner liberty to respond to the letter dated September 21, 2020, by raising their objections. The Respondents were granted liberty to proceed thereafter in accordance with the law, implying that formal proceedings, if necessary, could be initiated after the petitioner's response. No specific findings were made on the merits of the ineligible ITC claim itself.

Facts

The petitioner, M/s Rajasthan Marbles & Co., challenged a letter dated September 21, 2020, issued by the Deputy Commissioner (Prev.), CGST & CX, Ranchi. This letter demanded payment of Rs. 17,03,497/- representing ineligible Input Tax Credit (ITC), along with interest and penalty. The demand arose from the Directorate General of Goods and Services Tax Intelligence, Jaipur, finding the petitioner to be a recipient of fake invoices from M/s A.S. Enterprises, without actual supply of goods or services. The petitioner argued that no proceedings under the CGST Act, 2017, were initiated before this demand letter was issued. The Revenue clarified that the letter was a pre-show cause intimation, not a demand or show-cause notice, allowing the petitioner to deposit the amount voluntarily before formal proceedings.

Key Issues

1. Whether the letter dated September 21, 2020, issued by the Deputy Commissioner (Prev.), CGST & CX, Ranchi, constitutes a demand or show-cause notice under the CGST Act, 2017, requiring prior adjudication proceedings? Petitioner's Contention: The petitioner argued that the letter was a direct demand for payment of ineligible ITC, interest, and penalty, issued without initiating any formal proceedings under the CGST Act, 2017. They contended that such a demand could not be made straightaway without following the prescribed procedural steps. Revenue's Contention: The Revenue submitted that the letter was merely a pre-show cause intimation. It was intended to inform the petitioner of the identified ineligible ITC and provide an opportunity to deposit the amount voluntarily. The Revenue stated that if the petitioner did not deposit the amount, proper proceedings, including the issuance of a show-cause notice, would follow.