GST Rulings

Can cross-examination be refused for ITC denial on purchases from cancelled dealers?

Brief facts

An order was passed, confirming demand in respect of denial of ITC to the petitioner on procurement from suppliers whose GST registrations were cancelled retrospectively.

The petitioner requested for a right to cross-examine the witnesses, whose statements were relied upon, as also the authors of documents which was sought to be relied upon by the proper officer during adjudication. However, such request was denied on account of paucity of time. Yet, the impugned order was passed.

Judgment of the High Court of Delhi

[dated April 16, 2024 from WP(C) No. 5342 of 2024 in Akshit Petrochem Private Limited v. Government of NCT of Delhi]

Denial of the right to cross-examine can cause grave and serious prejudice. This view was also upheld in the judgment of the Co-ordinate Bench of the High Court of Delhi dated 30.01.2024 in WP (C) 15808/2022. Such a right cannot be declined due to paucity of time.

Consequently, denial of ITC, in respect of purchases from cancelled dealers, cannot be sustained and the impugned order was set aside to that extent. The Show Cause Notice was remitted for re-adjudication on the said aspect after summoning the said dealers/suppliers for the purpose of cross-examination and giving an opportunity of hearing to the petitioner.

Analysis / Comments

In similar instances where ITC is denied on purchases from cancelled dealers, the taxable person should seek cross-examination of witnesses or authors of relied upon documents as a matter of right and use such opportunity judiciously.

Srinivasan V, Advocate

Recent Posts

EWB detention proceedings conclude on penalty payment, no need to issue order: Orissa HC

Orissa HC judgment dt. 18.02.2025 in W.P.(C) No. 3055 of 2025 Goods were detained &…

3 weeks ago

Refund limitation for GST wrongly paid

GST was paid but later clarified as not payable by a beneficial circular. In Messrs…

1 month ago

GST | Should 3 months be construed as 90 days for limitation?

Order of the Andhra Pradesh High Court [dated 05.02.2025, in Cotton Corporation of India vs.…

1 month ago

GST | Should the date of issue of notice/order be included to calculate limitation?

Order of the Patna High Court [dated 04.02.2025, in Brand Protection Services (P.) Ltd. vs.…

1 month ago

Notice/order can be served on the portal only if it cannot be served in person / by post / email: Madras HC

Order of the High Court of Madras [dated 06.01.2025, in Udumalpet Sarvodaya Sangham vs. Authority,…

2 months ago

Goods intercepted due to absence of e-invoice; proceedings to lie u/s.122 not s.129 CGST Act: HC

Order of the High Court of Kerala [dated 07.11.2024, in OSEL Devices Ltd. vs. Assistant…

4 months ago