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The Petitioner inter-alia engaged in dealing in the business of goods and services relating to Ferrous waste and scrap, re-melting scrap ingots of iron or steel, flat-rolled products of iron or non-alloy steel etc. In connection thereof, basis the investigation carried on by the Revenue authorities the petitioner received a letter dated 25 April 2019 wherein it was requested to reverse the input tax credit availed on invoices from suppliers which were considered as fake invoices. Further in respect thereto, the Revenue authorities sent an intimation of tax dated 22 January 2021 wherein payment was advised to be paid failing which a show cause would be issued u/s 74(1) of the Act.
In regards to above, the HC observed that section 74(5) does not provide any right to the Revenue to raise a tax demand when an investigation is still in process. Further, it was also held that the Revenue cannot coerced the Petitioner to make any payment without issuing notice u/s 74(1) of the Act and following the procedure therein. In the instant case, the action of the Revenue was wholly arbitrary and without jurisdiction. Thus, the petition was allowed and also HC directed to refund the duty paid by the Petitioner along with interest.
Deem Distributors Private Limited [Writ Petition No. 7063 of 2021]
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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