Karnataka High Court Sends ITC Matter Back to GST Authorities for Reconsideration

The Karnataka High Court has sent a matter to the GST authorities, highlighting that every taxpayer must get a fair chance to explain their side before any tax order is passed.

The GST department alleged that the petitioner company, RJ Craft Interior, has claimed ineligible Input Tax Credit (ITC) and there is a discrepancy related to the ITC claim. As a result, the department had sent a show-cause notice, but the company could not reply due to genuine reasons. Even without their response, the authorities continued to pass a GST order.

The company filed a writ before the Karnataka High Court. The petitioner company submitted that if given a chance, it would explain the discrepancies.

The court agreed that the issue is factual in nature and the authority had passed the order without receiving a response to the show cause notice.

As a result, the court quashed the order and sent the case to the tax authority. The company was allowed to file its reply to the notice, and the authorities were directed to review everything before making a final decision.