HC remanded matter as AO didn’t consider applicability of circulars referred by assessee{ Amman Try Trading Company (P.) Ltd. vs. State Tax Officer – V (RS) [2025] 180 taxmann.com 30 (Madras)}
Facts:
- Assessee had given a corporate guarantee to a related party, and the department demanded GST on it treating it as a supply of service.
- Assessee contended that the transaction was not taxable, relying on CBIC Circulars, absence of consideration, and the fact that the recipient was eligible for full ITC, causing no revenue loss.
- The adjudicating authority, however, passed a non-speaking order without properly considering these submissions or the cited circulars.
Issue:
Whether the demand of GST on corporate guarantee could be sustained when the adjudicating authority failed to consider the assessee’s defenses and relevant circulars.
Held:
- Madras High Court held that the order was non-speaking and unsustainable, as it did not deal with the assessee’s arguments or the applicability of binding CBIC circulars.
- The matter was set aside and remanded for fresh adjudication after giving the assessee an opportunity of hearing and considering the circulars relied upon.
