Case Summary
Case Title: Raiganj Jeevan Rekha Diagnostic Private Limited & Anr. v. Union of India & Ors.
Court: High Court at Calcutta (Appellate Side)
Petition No.: M.A.T. 903 of 2025 with I.A. No. CAN 1 of 2025 & W.P.A. 507 of 2025
Date of Judgment: 08.07.2025
Category of Dispute: Input Tax Credit – Reversal of wrongly availed ITC
Relevant Sections: Section 16, 73, and 74 of the CGST Act, 2017; Rule 42 & 43 of CGST Rules, 2017
Facts (Paras 1–6)
The appellants, a diagnostic centre, were served a show-cause notice by email for wrongly availing Input Tax Credit (ITC). They did not respond, leading to an ex parte order dated 14.12.2023 by the Assistant Commissioner of CGST & CX, Raiganj. Their appeal before the Additional Commissioner (Appeals), Siliguri, was dismissed on 04.10.2024. Since no Tribunal was constituted, they filed a writ petition where interim relief was made conditional on depositing 10% of the disputed tax. The appellants contended that ITC had already been reversed through their GSTR-3B returns, supported by a tabulated statement. However, the appellate authority observed that the return for August 2017 was missing, creating factual inconsistency.
Questions (Para 3 & 6–7)
The central issue was whether the appellants had indeed reversed the wrongly availed ITC and whether a pre-deposit condition was justified when the dispute could be revenue neutral.
Observations (Paras 7–8)
The Court noted that if ITC was already reversed, the matter becomes revenue neutral, eliminating the need for pre-deposit. The fact that no interest was levied by the adjudicating authority indicated probable reversal of ITC. The Court emphasized that the dispute was factual and required a fresh opportunity for reconciliation.
Judgment (Paras 9–11)
The High Court set aside the appellate order dated 04.10.2024 and remanded the matter to the original adjudicating authority. The order-in-original dated 14.12.2023 was directed to be treated as a show-cause notice. The appellants were given 15 days to file a detailed reply with supporting documents. The adjudicating authority must provide a personal hearing and pass a fresh reasoned order in accordance with law. No costs were imposed.
Table of Cases Referred
| Case Referred | Court | Verdict / Ratio |
|---|---|---|
| None explicitly referred in the judgment | – | – |
Between Fine Lines
For taxpayers, this judgment underscores that once ITC is reversed, the issue becomes revenue neutral, and authorities cannot mechanically insist on pre-deposit. Courts will favour remand if factual reconciliation of ITC is required, ensuring fair opportunity to present evidence.
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