Smt.Pavuluri Chaintanya vs. Assistant Commissioner (CT) Audit

Held

The Court held that the dispute centered on two key aspects: whether the transfer of goods between the petitioner and her vendor had occurred, and if the transactions for which ITC was claimed had indeed suffered tax at the vendor's end. Recognizing the petitioner's plea that she had attended the office for a personal hearing despite physical discomfort following childbirth, the Court deemed it in the interest of justice to grant her another opportunity. Consequently, the impugned order was set aside. Respondent No. 1 was directed to issue a fresh notice for a personal hearing to the petitioner. The petitioner was instructed to appear either in person or through an agent. After conducting a due inquiry, Respondent No. 1 is to pass a fresh order. The petitioner retains the right to avail appellate remedies against the fresh order.

Facts

The petitioner, Smt. Pavuluri Chaintanya, operating as M/s.POWEREVER, filed a writ petition challenging an order dated October 31, 2017, passed by the Assistant Commissioner (CT) Audit, Narasaraopet Division (Respondent No. 1). The impugned order rejected the petitioner's claim for input tax credit (ITC). The rejection was based on the ground that there was no actual transport of goods between the petitioner and her vendor, who is her husband. The petitioner contended that the tax on these transactions was duly assessed and paid by her husband, and she had submitted the assessment order and tax receipts to Respondent No. 1. She also claimed that despite attending the office for a personal hearing, she was not afforded an opportunity to explain her case, citing personal inconvenience due to recent childbirth.

Key Issues

1. Whether the impugned order dated 31.10.2017, passed by Respondent No. 1, rejecting the petitioner's input tax credit (ITC) claim, is sustainable in law, particularly concerning the alleged lack of transport of goods between the petitioner and her vendor (husband)? Petitioner's arguments: The petitioner argued that the tax on the transactions for which ITC was claimed was duly assessed and paid by her husband, who is the vendor. She contended that she had submitted the relevant assessment order and tax payment receipts to Respondent No. 1. Furthermore, the petitioner asserted that she was denied a personal hearing despite attending the office, which prevented her from explaining her case, especially considering her recent childbirth. Revenue's arguments: The respondents, through the learned Special Standing Counsel, contended that the petitioner was not physically present on the day fixed for the personal hearing.