GST | Separate Demands For Reversal Of Availed ITC & Utilisation Of ITC Is Prima Facie Duplication Of Demand: Delhi High Court

The Delhi High Court has observed that demand raised against an assessee qua reversal of availed Input Tax Credit (ITC) and qua utilisation of ITC prima facie constitutes double demand.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus granted liberty to the Petitioner-assessee to approach the Appellate Authority against such demand, and waived predeposit qua demand of ineligible ITC.It observed, “On a prima facie view, it appears that there would be duplication of two demands as demand qua reversal of availed ITC and demand qua utilisation of ITC would be one and the same thing. But both have been separately demanded in the impugned order.”The Petitioner runs a sweetmeat shop and a restaurant. It had challenged an order raising demand of ineligible input tax credit amounting to Rs 11,47,55,615/- used for discharging outward tax liability for the financial year 2017-18 to 2022-23 and Rs 14,94,27,762/- ineligible ITC for the financial year 2017-18, among other grounds.The Department's reasoning behind the demand was that a restaurant cannot avail of ITC as the GST charged on restaurants is only 5%.The Petitioner on the other hand contended that the Department had raised 'double demand' firstly by utilizing the ITC availed of and secondly, by not allowing the ITC which has been availed of.Agreeing the High Court permitted the Petitioner to prefer an appeal against demand without making pre-deposit qua demand for ineligible ITC of Rs 11,47,55,615/-.“If any deposits have already been made by the Petitioner, adjustment thereof shall be given qua the pre-deposit,” it added and disposed of the matter.Appearance: Mr. Garuav Gupta, Adv. for Petitioner; Ms. Monica Benjamin, SSC with Ms. Nancy Jain, Adv. for RespondentCase title: M/S Lala Shivnath Rai Sumerchand Confectioner Private Limited v. Additional Commissioner, Cgst Delhi-West, New DelhiCitation: 2025 LiveLaw (Del) 694Case no.: W.P.(C) 8028/2025Click here to read order

GST | Separate Demands For Reversal Of Availed ITC & Utilisation Of ITC Is Prima Facie Duplication Of Demand: Delhi High Court

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