M/S Narula Menthol Industries vs. Union Of INDIA
Held
The Court took on record the statement made by the respondents' counsel that the impugned communication was not an actual recovery action but merely an intimation of demand, and thus, there was no imminent threat of recovery. Consequently, the Court closed the writ petition. However, it granted liberty to the respondents to proceed with any recovery action for Input Tax Credit strictly in accordance with the law, specifically referencing the procedures provided under Sections 73 and 74 of the CGST Act, read with the relevant Rules. The Court did not decide on the merits of the petitioner's contention regarding the violation of Section 73 or the circular, as the matter was closed based on the statement of the respondents.
Facts
The petitioner challenged a demand letter dated June 28, 2021, issued by respondent No. 2, which allegedly sought recovery of Input Tax Credit (ITC). The petitioner argued that the proceedings initiated by this letter violated Section 73 of the CGST Act and a government circular requiring the reference of a DIN number for recovery actions. The respondents' counsel, based on instructions, stated that the letter was not an actual recovery action but merely an intimation of demand, and there was no imminent threat of recovery.
Key Issues
1. Whether the demand letter dated June 28, 2021, issued by respondent No. 2, constitutes a violation of Section 73 of the CGST Act, considering it allegedly lacks a DIN number as required by a government circular for recovery actions. Petitioner's arguments: The petitioner contended that the communication was a demand letter and its issuance was in violation of Section 73 of the CGST Act and a government circular mandating the inclusion of a DIN number for recovery of ITC. Revenue's arguments: The respondents' counsel, based on instructions, stated that the impugned communication was not an actual recovery action but merely an intimation of demand, and therefore, there was no imminent threat of recovery against the petitioner.
Sections Cited
Section 73, Section 74
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SL. No Date Office Notes, reports, orders or proceedings or directions and Registrar’s order with Signatures COURT’S OR JUDGES’S ORDERS
2021
WPMS No. 1476 of 2021 Hon’ble Sharad Kumar Sharma, J. (Through Hybrid Mode) Mr. Rohit Arora, Advocate, for the petitioner. Mr. Shobhit Saharia, Advocate, for the respondent(s). This matter was taken up yesterday and thereafter, on the request of the respondents’ counsel, it was placed today. Before the proceedings could be addressed by the learned counsel for the petitioner on merits of the matter, so far it relates to the challenge given by the petitioner to the demand letter bearing No. 9321 dated 28.06.2021, which was issued by respondent No. 2, where allegedly the demand of Input Tax Credit was the subject matter of a demand, as per the letter, which has been appended with the writ petition. The petitioner has raised his several contentions in support of his argument, that the entire proceedings initiated on the basis of the said communication, which he alleges to be a demand letter, in fact, happens to be in violation of Section 73 of the Act, as well as the Circular, which has been issued by
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