Delhi HC Instructs Initiation of Proceedings After Valid SCN with Information About GST ITC

In a recent legal matter, the Delhi High Court mandated the commencement of proceedings only upon issuance of a comprehensive Show Cause Notice (SCN) providing full particulars concerning the Income Tax Credit (ITC).

RS Wires Industries filed a writ petition challenging the show cause notice issued by the respondent under Section 29 of the Goods and Services Tax Act.

During the proceedings, the petitioner’s counsel, R. P. Singh, contended that the show cause notice issued under Section 29 of the Goods and Services Tax Act, 2017, was flawed due to its lack of information regarding the alleged improper availing or utilization of input tax credit. It was further argued that the details accompanying the show cause notice were simply photographs of an unidentified individual. Additionally, the rejection of the petitioner’s revocation petition lacked proper justification.

The court noted that the show cause notice dated 18.04.2022, which sought the cancellation of registration, cited reasons for cancellation as “Wrongful availment or utilization of Input Tax Credit (details notice enclosed).” However, the court observed that neither the show cause notice nor the order rejecting the revocation application provided any specifics or reasons regarding the alleged wrongful availing or utilization of input tax credit.

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After evaluating the arguments and facts presented by both parties, a division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja granted the writ petition and instructed the respondent to initiate appropriate proceedings by the law, preceded by a proper show cause notice (SCN) containing comprehensive details.

For the revenue Rajeev Aggarwal with Ms. Samridhi Vats, Advocates, appeared.