Allegations in SCN should be clear and specific and the findings cannot go beyond the allegations levelled in SCN: High Court

The present petition has been filed by the GST Department challenging the order passed by the Additional Commissioner (Appeals) allowing the refund claim of taxpayer. 

Facts:

1. Taxpayer purchased some goods from Supplier in Surat, which were sent to the warehouse of taxpayer in Surat and thereafter after processing the same goods were sent from Surat to Kanpur for export.

2. The ITC refund claim of the taxpayer was rejected in Scrutiny on the ground that movement of goods from supplier in Surat to taxpayer in Surat was without e-way bills and it was further alleged that all theses three suppliers had done huge volume of business in a very short span of time and subsequently their registration was canceled.

Taxpayer:

The taxpayer aggrieved against the said order preferred an appeal before the Additional Commissioner (Appeals) CGST, Lucknow wherein it was specifically stated that the inputs received by the taxpayer were sent from Surat to the warehouse of the taxpayer at Surat where they were processed and subsequently the goods were exported through ICD Kanpur after transporting the goods from Surat to Kanpur. They placed reliance upon the Notification No. GSL/GST/Rule-138 dated 19.09.2018 issued by the Commissioner of State Tax, Gujarat providing that e-way bill was not required to be generated for intra-city movement of any goods irrespective of the value.

Held:

In the present case, the show cause notice as issued by the revenue had made precise allegations that the supplier of the goods had supplied goods to the taxpayer without generation of the e-way bills which was contrary to the E-Way Bill Rules and thus, the refund claim was liable to be rejected. However taxpayer has furnished Notification issued by Commissioner of State Tax, Gujarat providing that e-way bill was not required to be generated for intra-city movement of any goods irrespective of the value.

That being the nature of the allegations levelled in the show cause notice, the submission of revenue that the goods sent from Surat to Kanpur for export did not carry e-way bills, cannot be accepted as it is well settled that the allegations as levelled in the show cause notice should be clear and specific and the findings cannot go beyond the allegations as levelled in the show cause notice.

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Show Cause Notice

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