Delhi High Court Sets Aside ₹45 Lakh GST Demand Against HUF After Revenue Confirms ITC Reversal

The Delhi High Court has recently set aside a GST demand against a Hindu Undivided Family after revenue authorities confirmed before the Court that the disputed input tax credit had been reversed prior to the issuance of the show-cause notice.

A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul was hearing a writ petition challenging orders that had disallowed ITC and raised a demand of over Rs 45 lakh for the financial year 2018–19.

The demand stemmed from a show cause notice issued under Section 73 of the Central Goods and Services Tax Act, 2017, alleging excess availment of ITC in GSTR-3B as compared to GSTR-2A. Subsequently, the adjudicating authority confirmed the demand, along with interest and penalties, which was largely upheld in appeal.

Before the High Court, the petitioner contended that the disputed ITC had already been reversed and correctly claimed under the appropriate head prior to the issuance of the show cause notice.

This ground was also taken up before the relevant authority but it remained unsubstantiated for want of documentary evidence.

Accordingly, the Court had directed the revenue to verify this submission.

As on the next date of hearing, counsel for the revenue confirmed the correctness of the petitioner's claim, the Court held that the impugned orders could not be sustained.

However, it remanded the matter to the adjudicating authority for fresh within 12 weeks.

The Court clarified that it had not expressed any opinion on the merits of the case.

For Petitioner: Mr. Akhil Krishan Maggu, Mr. Vikas Sareen, Ms. Oshin Maggu, Mr. Aryan Nagpal, Ms. Mehak Sharma, Advs.

For Respondents: Mr. Pranay Mohan Govil, SSC