Tvl. Skp Readymix vs. The Commissioner Of Commercial Taxes

Facts

The petitioner, Tvl. SKP READYMIX, filed a writ petition challenging an order dated 13.03.2025 passed by the second respondent (later amended to the third respondent being the competent authority). The impugned order confirmed a demand, preceded by an office intimation (DRC-01A) and a show cause notice (DRC-01), for the tax period 2022-23. The defects identified were excess claim of Input Tax Credit (ITC) due to GSTR 2A vs 3B mismatch, tax due on short reporting of outward supply, and blocked credit under Section 17(5). The petitioner admitted liability for one defect, paid for another, and contended that supporting documents for the third defect were not considered by the authority.

Held

The Court held that the impugned order, to the extent it confirmed the demand for defects numbered 2 (tax due on short report of outward supply) and 3 (blocked credit u/s.17(5)), was unsustainable. The reasoning was that while the third respondent (the competent authority) had extracted the petitioner's reply and submissions made during the personal hearing, there was no clear discussion or application of mind reflected in the order. The Court found that the order lacked sufficient reasoning to justify the confirmation of the demand. Consequently, the impugned order was set aside concerning these two defects, and the case was remitted back to the respondent for passing a fresh order. The Court directed the respondent to endeavor to pass a fresh order on merits within three months, ensuring the petitioner is heard and a speaking order is passed. The petitioner was also directed to produce all necessary documents to substantiate their defense, failing which the respondent could confirm the demand based on the doctrine of preponderance of probability. The issue concerning the excess claim of ITC (defect no.1) and the admitted liability for one defect were not expressly discussed or set aside, implying they were either resolved or not the subject of the Court's specific intervention in this order.

Key Issues

1. Whether the impugned order passed by the second respondent (later corrected to the third respondent) suffers from non-application of mind and lack of proper discussion, rendering it unsustainable in law, particularly concerning defects numbered 2 (tax due on short report of outward supply) and 3 (blocked credit u/s.17(5))? Petitioner's Arguments: The petitioner argued that the impugned order failed to provide a clear discussion of their reply and the documents submitted, especially concerning the short reporting of outward supply and blocked credit. They contended that the authority merely extracted their reply without adequate consideration, making the confirmation of demand unsustainable. Revenue's Arguments: The judgment records no specific arguments from the revenue or state. However, the impugned order, as extracted in the judgment, stated that the taxpayer had not filed supporting documents to prove the genuineness of their reply, leading to the confirmation of the demand.