2023 (9) TMI 956 - HC - GST

Validity of SCN issued under Section 74 of the Maharashtra Goods and Service Tax / Central Goods and Service Tax Act, 2017 - impugned order does not record any reasons/findings in regard to such contentions as urged by the Petitioner - HELD THAT - It is clearly seen in the paragraph titled findings , that none of the contentions as urged by the Petitioner are recorded as also there is no discussion whatsoever on the issues as raised by the Petitioner. This more particularly, when the impugned order raises a demand against the Petitioner on interest payable under Section 50(3) of the CGST Act, 2017 as also a penalty being imposed under Section 122 of the CGST/SGST Act, 2017 read with Section 73(9) of the CGST/SGST Act, 2017. It is also the case of the petitioner that in the show cause notice, there was no invocation of the provisions of Section 122 in regard to the penalty. On such contentions, learned counsel for the petitioner would submit that the order impugned is defective and illegal on the ground that it records no reasons hence it would be an order without application of mind. The orders dated 18th January 2023 as impugned in both the writ petitions as passed by the Deputy Commissioner, Sales Tax are quashed and set aside with liberty to the Department to issue a fresh show cause notice to the petitioner within a period of four weeks from today - Petition disposed off.

Summary

Issues Involved:
The challenge to orders dated 18th January 2023 passed by the Deputy Commissioner of Sales Tax under Section 74 of the Maharashtra Goods and Service Tax / Central Goods and Service Tax Act, 2017.

Issue 1: Lack of Reasons in Impugned Order

The contention of the Petitioner was that the impugned order did not record any reasons or findings regarding the detailed reply and personal hearing granted to the Petitioner. The Court found merit in this contention as none of the contentions raised by the Petitioner were recorded in the order, especially concerning the demand for interest and penalty under relevant sections of the CGST/SGST Act, 2017.

Issue 2: Defective and Illegal Order

The Petitioner argued that the order was defective and illegal as it did not provide any reasons, and there was no invocation of Section 122 concerning the penalty in the show cause notice. The Court acknowledged this argument and noted that the order appeared to be without the application of mind due to the lack of reasons provided.

Court's Decision

After considering the submissions, the Court accepted the Department's stand to set aside the impugned order. The Department was granted liberty to issue a fresh show cause notice, which would be adjudicated after considering the Petitioner's reply and granting a personal hearing. Consequently, the Court quashed and set aside the orders dated 18th January 2023, allowing the Department to issue a fresh show cause notice within four weeks. The Court emphasized that the fresh order should be passed with appropriate reasons, considering the case of the Petitioner.