2025-VIL-621-HP
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SGST High Court Cases

GST – Levy of penalty and interest without determining the tax demand, availment of disputed Input Tax Credit, Payment under protest - Whether the impugned order passed levying interest and penalty based on the petitioner's deposit of amount under protest, is valid – HELD - The manner in which the Commissioner acted in this case cannot be countenanced and leaves a lot to be desired - Once the petitioner had deposited the amount 'under protest', the same could not have been considered an admission of liability. The necessary corollary of deposit under protest is that the amount towards the alleged liability has been deposited without admitting the liability and the petitioner has the inherent right to challenge the order – Further, the adjudicating authority completely erred and failed to take note that Input Tax Credit could not have been reversed merely on the basis of suspicion without carrying out any independent investigation coupled with other evidence – The Commissioner was required to conduct an impartial inquiry regarding the aforesaid amount and could not have based its decision solely on summary of show cause notice in Form DRC-01 - the order passed charging interest and levying penalty is set aside and the Respondents are directed to issue a fresh DRC-07 incorporating only the disputed amount of tax on account of the alleged wrong availment of ITC, so as to enable the petitioner to agitate the same by filing an appeal before the Appellate Authority – The writ petition is allowed
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