The High Court observed that the company had made the required submission and therefore set aside the order.
Nidhi | Jul 24, 2025 |
GST: High Court Order Fresh Adjudication of ITC Demand Order for Non-Consideration of Creditor Ledgers
In a recent judgement, the Delhi High Court provided relief to JMD Lightening and Cable Co., which had challenged a massive GST demand of over Rs 80 crores, issued even after the company made the required submission.
The company, JMD Lightening and Cable, received a show cause notice dated 31.07.2022 from the GST department, to which it replied by submitting a list of sundry creditors between April 2018 and March 2023. The final order 25.01.2025 was issued to the company after the issuance of Show Cause Notice by the GST authority. The company contended that the credit ledger, which was submitted by the company for the sundry creditors, was not considered by the adjudicating authority. Therefore, the company approached the High Court of Delhi to challenge the order dated 25.01.2025.
The company referred to Paragraph No. 18.1 of the impugned order, which claimed that even after the GST department repeatedly asked for the creditors’ ledger for FY 2017-18, the company failed to submit the complete ledgers from FY 2017-18. Based on this, the department calculated the amount pending payment to the creditors and the ITC liability of the company as Rs 75,629,152. Therefore, the department imposed a high penalty and tax of Rs 80,92,84,99. The department did not even give credit to the company against the Input Tax Credit (ITC) deposit of Rs 32 Lakh made by the company. The company relied on e-mail dated 22.05.2024, which showed that the company had submitted the list of credit ledgers for the year 2017-18.
The High Court observed that the company had already made such a submission and yet the department issued the final order without considering the submission made by the company. Therefore, the High Court set aside the order and remanded this matter to the adjudicating authority for fresh consideration.
The court allowed the company to file a composite reply to the show cause notice within 30 days. After this, a personal hearing must be granted, and the matter should be decided after considering all submissions.
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