No opportunity given to justify ITC availed on Merits: Madras HC sets aside GST Demand Order

The Madras High Court recently overturned an order in a GST dispute involving Palani Paramanandam, proprietor of M/s. Vignesh Binding Works. The court's decision centered on discrepancies between claimed Input Tax Credit (ITC) and official records. Stressing adherence to natural justice principles, the court conditionally remanded the case, allowing Paramanandam to justify the ITC claim. Paramanandam had filed a writ petition challenging the July 20, 2023, order issued by the Avadi Assessment Circle's State Tax Officer, alleging violations of CGST Act, 2017, and TNGST Act, 2017, and citing procedural irregularities in notice dissemination through the GST portal alone. P. Rajkumar, representing Paramanandam, argued for the legitimacy of the ITC claimed. The court required Paramanandam to remit 10% of the disputed tax and cess to proceed with the case, also mandating a fresh assessment post-reply submission.