Delhi High Court
Akshit Petrochem Pvt. Ltd. Through Its ... vs Govt. Of Nct Of Delhi Through Chief ... on 16 April, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~44
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 16.04.2024
+ W.P.(C) 5342/2024 & CM APPL. 21907/2024
AKSHIT PETROCHEM PVT. LTD. THROUGH ITS DIRECTOR,
SH. VIVEK SHANKER .... Petitioner
versus
GOVT. OF NCT OF DELHI THROUGH CHIEF SECRETARY &
ORS. ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. A. K. Babbar & Mr. Surinder Kumar, Advocates.
For the Respondents: Mr. Rajeev Aggarwal, ASC with Ms. Samridhi Vats,
Advocate.
Mr. Abhishek Khanna, SPC with Mr. Parvesh Khanna, Mr.
Rahul Sabharwal, Ms Priyanka Sabhawal & Mr. Aartha
Rathore, Advocates for R-4.
Mr. Anurag Ojha, SSC with Mr. Subham Kumar & Mr
Vipul Teotia, Advocates for R-5.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns the order dated 29.12.2023 whereby an order has
been passed against under Section 73 of the Central Goods and Services
Tax Act and a demand created against the petitioner.
2. Petitioner impugns the order dated 29.12.2023 to the limited extend
that it confirms the demand in respect of denial of ITC to the petitioner with
respect to the suppliers whose GST registration has been cancelled
retrospectively.
3. Learned counsel for the petitioner submits that a specific request was
made to the proper officer for a right of cross-examination of the witnesses
whose statement was being relied upon as also the authors of documents
which was sought to be relied upon by the proper officer during
adjudication proceedings. He submits that the said request for cross-
examination has been denied on account of paucity of time and the
impugned order has been issued.
4. Learned counsel further submits that petitioner was made to deposit
a sum of Rs 20 Lakhs under coercion at the time of search and survey. He
submits that despite the issue being raised by the petitioner and noticed by
the proper officer in the proceedings, same has not been considered nor
dealt with in the impugned order.
5. Reference may be had to the proceedings sheet dated 01.12.2023
wherein the proper officer has noted as under:-
" Present Sh. AK Babbar, advocate on behalf of M/s Akshit
Petrochem Pvt. Ltd, GSTIN No. 07AAICA229201W in r/o DRC-01
for FY-2017-18. The taxpayer has filed reply on common portal.
The taxpayer has also submitted as request for cross-examination
of cancelled dealers whose ITC is proposed to be denied to the
taxpayer. The same is taken on record. The taxpayer also brings to
notice that an enforcement survey was also carried out. However,
the said proceedings are not part of instant DRC-01 notice. The
undersigned do intend to summon the cancelled dealers/suppliers
of the taxpayer for cross-examination due to paucity of time the
request can't be allowed.
The taxpayer wishes to make addl. Submissions. The same
is allowed. It has also been conveyed, that in the interest of
revenue, no relief on accounts of availing ITC from cancelled
dealers will be granted. NOH: 13/12/2023."
6. Perusal of the proceedings sheet dated 01.12.2023 shows that a
specific request was made by the petitioner for cross-examination of the
cancelled dealers whose ITC was proposed to be denied to the petitioner.
The proper officer has noted that the proper officer intended to summon the
cancelled dealers/suppliers of tax payer for cross-examination, however, on
account of paucity of time, the request was disallowed.
7. Denial of the right of cross-examination can cause grave and serious
prejudice to an entity. In the instant case, the proper officer has himself
noticed that the proper officer has intended to summon the said person,
however on account of paucity of time declined to do so. Such a course
cannot be countenance for the same caused grave prejudice to the person
against whom the said statement or document is sought to be relied upon.
8. Reference may be had to the judgment of a Co-ordinate Bench of
this Court dated 30.01.2024 in WP (C) 15808/2022 title Naman Gupta vs
Commissioner of Customs Airports and General wherein one of us (HMJ
Ravinder Dudeja) was a party, and the Co-ordinate Bench has held that
denial of a right of cross-examination results in serious prejudice.
9. Accordingly in view of the above and specially in view of the fact
that the proper officer himself intended to summon the said witnesses,
however did not do so on account of paucity of time, the impugned order to
the limited extent, of the denial of input credit tax in respect of cancelled
dealers, cannot be sustained and is accordingly set aside. The Show Cause
Notice is remitted to the proper officer 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.
10. Further, it may be noticed that in the proceedings sheet dated
13.12.2023, the proper officer has specifically noticed the request of the
petitioner for refund of Rs 20 Lakhs that were allegedly got deposited
during search and survey proceedings on 15.07.2022 and was alleged not to
be a voluntary deposit and a deposit made under pressure in presence of the
visiting team. Said issue has also not been dealt with in the impugned order.
11. Reference may also be had to the judgment of a Coordinate Bench of
this Court dated 05.12.2023 in WP (C) 17171/2022 titled Santosh Kumar
Gupta Vs. Commissioner of Delhi Goods & Service Tax Act, wherein an
involuntary deposit was directed to be refunded.
12. Since the contention of the petitioner is that the deposit was not
voluntary and was under coercion and a request for refund was made to the
proper officer, the proper office should have considered the same in
accordance with law. Accordingly, while reconsidering the issue with
regard to denial of input tax credit for cancelled dealer, the proper officer
shall also consider the request of the petitioner for refund of the said
amount of Rs. 20 lacs in accordance with law keeping in view the various
pronouncements rendered by this Court with regard to involuntary deposit.
13. It is clarified that this Court has neither considered nor commented
upon the nature of deposit made by the petitioner i.e. as to whether the
same was voluntary or involuntary and also with regard to the contention of
the respondent that even if the amount is held to be an involuntary deposit,
the same is liable to be adjusted against a demand that is liable to be created
against the petitioner.
14. All rights and contentions of the parties are left open.
15. Petition is accordingly petition is allowed in the above terms with a
limited order of remit to the proper officer as noticed hereinabove.
16. Further, the challenge to Notification No. 9 of 2023 with regard to
the initial extension of time is left open.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
APRIL 16, 2024/sk
