Order Date – 06 July 2022

Facts – 

• The Petitioner, Abhishek Gumber (Proprietor of M/S AG Enterprises), received a show-cause notice (‘SCN’) earlier on 08.02.2021, which has already been adjudicated by the concerned authority, via the order dated 12.05.2022.
• The Petitioner sought refund claim of Rs. 12,71,426/- which was rejected (according to the aforementioned order) on the ground that the refund was founded on forged input tax credit claim. 
• The Petitioner in this regard filed appeal on 26.05.2022.
• The appellant received a demand notice in consonance with the provisions of Section 75(4) of the CGST Act on 14.06.2022.
• Aggrieved the petitioner filed a writ petition for the dismissal of abovementioned demand notice, since an appeal has already been filed against the original order.

Issue – 

• Whether the issuance of a writ to set aside the demand notice to deposit tax of Rs. 29,65,670/- is contestable?

 Order – 

• The Court observed that it is clear that once the petitioner’s refund claim was rejected on the ground that it was founded on forged ITC, the petitioner would be liable to pay tax, interest and penalty, in the event the adjudication order is sustained.
• In the event the appeal were to be dismissed, it would then be open to the respondent/ revenue to take recourse to Section 75 of the Act and the attendant rules framed thereunder.
• Therefore, the Court held that the impugned demand notice dated 14.06.2022 is liable to be set aside, with liberty to the respondent to trigger the process under Section 75 of the Act, once clarity is attained with regard to the outcome of the pending appeal lodged by the petitioner.
• The writ petition is disposed with the above terms.