The Delhi High Court has quashed a Goods and Services Tax (GST) demand of Rs. 150 crore against ICICI Lombard General Insurance Company Limited. The company had been issued a demand notice by the GST Officer, Department of Trade and Taxes, Government of the National Capital Territory of Delhi, for the financial year 2019-20. The demand included a tax amount of Rs. 1,49,55,43,768, interest of Rs. 1,24,34,72,940, and a penalty of Rs. 14,95,54,377.
The GST demand was based on the company’s entitlement to an input tax credit, as well as discrepancies in the reconciliation of numbers provided in monthly returns with the corresponding yearly return, and subsequent reconciliation with other parameters. ICICI Lombard General Insurance Company Limited challenged the demand by filing a writ petition with the Delhi High Court.
The court has now overturned the Order-in-Original issued by the GST Officer and has directed the adjudicating authority to start the process anew, taking into account the Show Cause Notice issued earlier and the company’s response to it. This means that the GST authorities will have to re-examine the company’s tax liability and issue a fresh order.
The court’s decision is a significant relief for ICICI Lombard General Insurance Company Limited, as it saves the company from paying a substantial amount of tax, interest, and penalty. The ruling also sets a precedent for other companies that may be facing similar GST demands based on discrepancies in their tax returns. The case highlights the importance of accurate reconciliation of tax returns and the need for companies to ensure that their tax compliance is in order to avoid such disputes.