2023 (7) TMI 707 - HC - GST

Validity of SCN - SCN does not disclose any detailed reasons for proposing the demand - Violation of principles of natural justice - HELD THAT - As apparent from the face of the impugned Show Cause Notice, the same did not clearly specify grounds on which a demand was proposed to be raised. Although, the said Show Cause Notice did indicate a table mentioning the quantum of tax and interest; it is not clear whether the said tabular statement was related to the proposed demand or called upon the petitioner to justify the same. Admittedly, the concerned officer did not afford the petitioner any further opportunity of being heard and passed the impugned order raising a demand of ₹29,17,30,644/-. The said order under Section 73 of the Act neither deals with the submissions made by the petitioner in its reply dated 01.09.2022 nor mentions any reason for raising the said demand - the procedure of affording the petitioner an opportunity to be heard prior to the expiry of the time afforded to him for responding to the impugned show cause notice, cannot be appreciated. An opportunity to be heard is not required to be a mere formality. It is to enable the noticee to canvas its case before the concerned officer. The purpose of eliciting a reply to the show-cause notice is to enable the noticee to place his stand on record. Thus, it is apposite that the noticee be permitted to file a reply prior to being afforded a hearing. The impugned order cannot be sustained - Petition allowed.

Summary

Issues Involved:
The petition impugning an order and a Show Cause Notice under the Delhi Goods and Services Tax Act, 2017.

Impugned Show Cause Notice:
The Show Cause Notice alleged non-payment of tax, short payment, erroneous refund, or wrongful input tax credit without detailed reasons. The petitioner was required to reply by a certain date and attend a personal hearing.

Petitioner's Response:
The petitioner submitted a detailed reply spanning over thirty-nine pages, addressing the observations in the audit report. The concerned officer did not provide any further opportunity for the petitioner to be heard before passing the order raising a significant demand.

Opportunity to be Heard:
The court found fault with the procedure of affording a personal hearing before the petitioner had a chance to respond adequately to the Show Cause Notice. An opportunity to be heard is crucial for the noticee to present their case effectively.

Court's Decision:
The court set aside the impugned order and Show Cause Notice, directing the concerned officer to reconsider the petitioner's response and issue a fresh order after providing a proper opportunity for the petitioner to be heard. The petition was allowed in favor of the petitioner.