M/S Lala Shivnath Rai Sumerchand Confectioner Private Limited v. Additional Commissioner, Cgst Delhi-West, New Delhi [W.P.(C) 8028/2025]
Background: 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 F.Y. 2017-18 to 2022-23 and Rs. 14,94,27,762/- ineligible ITC for the F.Y. 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 that had been availed of.
Decision: 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. 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. If any deposits have already been made by the Petitioner, adjustment thereof shall be given qua the pre-deposit.
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