HC asks tax dept to not take coercive action against Canon on demand order
This story was originally published at 18:18 IST on 23 July 2025
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NEW DELHI – The Delhi High Court has asked the tax department to not take any coercive action against Canon India Pvt. Ltd. on an INR 22.4-million tax demand order for financial year 2017-18 (Apr-Mar). The high court issued notices to the Commissioner of Central Tax, (Appeals-II), Delhi and others and listed Canon India's plea against the demand order on Sep. 25.
In 2024, the Commissioner of Central Tax had upheld a demand against Canon on the grounds that the company had availed excess input tax credit and made short-payment of goods and services tax. The petitioner also challenged the show-cause notices issued in 2023 by the tax department which culminated in the demand order.
Canon India said that the short payment of excess input tax credit availed was suo moto paid by it to the tax department prior to the issuance of any show-cause notice. However, the demand order incorrectly confirmed the show-cause notice's allegations, Canon India said.
In 2022, an audit observation requisition was issued by the tax department to Canon India, informing the latter of discrepancies related to excess input tax credit availed and short payment of goods and services tax. Consequently, the petitioner filed a response with detailed explanation and supporting documents.
However, in 2023, the tax department issued show-cause notices under Section 74 of the Central Goods and Services Act, 2017, alleging suppression on the grounds that if the department had not conducted enquiry, facts regarding the alleged discrepancies would not have come to light. In its response, the petitioner said that it had paid back the excess input tax credit. End
Reported by Surya Tripathi
Edited by Avishek Dutta
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