M/S Shivalik Containers PVT LTD vs. The Assistant Commissioner State Taxes And Excise And Another

Held

The Court held that appropriate directions were required to be issued to the adjudicating authority, the Assistant Commissioner, State Taxes and Excise, Nahan. This was particularly in light of the instructions placed on record, which stated that after the supplier deposited the tax along with interest, the ITC was available to the recipient. Consequently, the Court set aside the impugned order dated 04.01.2023. The Assistant Commissioner was directed to re-open the issue and re-adjudicate the matter in accordance with the law. The adjudicating authority was tasked with determining the petitioner's liability, if any, or accepting its claim as admissible under law. The Court mandated that this re-adjudication be completed on or before January 31, 2026. The petition was disposed of in these terms.

Facts

The petitioner, M/s Shivalik Containers Pvt. Ltd., filed a writ petition challenging a show cause notice and order dated 04.01.2023, issued under Section 74 of the CGST Act, 2017. This order raised a demand of ₹16,72,140/- for non-payment of tax by the petitioner's supplier, for which the petitioner had claimed Input Tax Credit (ITC). The respondents, represented by the Assistant Commissioner and another, issued the impugned order. During the proceedings, the respondents placed on record instructions indicating that the supplier, M/s Shivalik Marketing, had filed the due returns for February 2020 to March 2020 along with interest, and the ITC was now available to the recipient. The petitioner argued that in light of this development, the petition should be allowed and the impugned order set aside.

Key Issues

1. Whether the impugned order dated 04.01.2023, issued under Section 74 of the CGST Act, 2017, is illegal and unsustainable in law, considering that the supplier has since filed the due returns and paid interest, making the ITC available to the petitioner? Petitioner's contention: The petitioner argued that in view of the instructions placed on record by the respondents, which confirmed that the supplier had filed the due returns and paid interest, thereby making the ITC available, the impugned order should be quashed and the petition allowed. Respondents' contention: The respondents argued that there was a delay of more than 5 years in the deposit of tax by the supplier, and the notice was rightly issued to the petitioner prior to the supplier's deposit. They further contended that unless directed by the Court, the concerned authority does not have the jurisdiction or power to re-adjudicate the claim of ITC, which becomes available to the recipient upon deposit of tax along with interest by the supplier.