2024 (3) TMI 336 - HC - GST

Violation of principles of natural justice - case of petitioner is that the impugned order does not take into consideration the reply submitted by the petitioner and is a cryptic order - demand including penalty - HELD THAT - Perusal of the Show Cause Notice shows that the Department has given separate headings under declaration of output tax, excess claim Input Tax Credit ITC , under declaration of ineligible ITC and ITC claim from cancelled dealers, return defaulters and tax nonpayers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving full disclosures under each of the heads. The impugned order, however, after recording the narration, records that the reply uploaded by the taxpayer is not satisfactory - The observation in the impugned order dated 24.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was devoid of merits. He merely held that the reply is devoid of merits which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. The impugned order records that petitioner has not furnished the requisite details. Proper Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner. Pursuant to the intimation being given, petitioner shall furnish the requisite explanation and documents. Thereafter, the Proper Officer shall re-adjudicate the show cause notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act - matter is remitted to the Proper Officer for re-adjudication. Petition disposed off.

Summary

Issues Involved:
The judgment involves the challenge against an order passed under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand of Rs. 8,22,82,330.00 including penalty was raised against the petitioner.

Impugned Order Disposal:
The petitioner challenged an order disposing of a Show Cause Notice proposing a significant demand against them. The petitioner argued that their detailed reply to the Show Cause Notice was not considered in the order, which was deemed cryptic.

Contentions and Observations:
The petitioner had provided a detailed reply to the Show Cause Notice, addressing various aspects such as declaration of output tax, excess claim Input Tax Credit, ineligible ITC, and ITC claim from cancelled dealers, return defaulters, and tax nonpayers. However, the impugned order deemed the reply unsatisfactory without proper justification or reconciliation, upholding the demand and penalty.

Judicial Findings:
The court found that the Proper Officer did not adequately consider the detailed reply submitted by the petitioner, as the order simply stated it was devoid of merits without a proper assessment. The court highlighted the lack of application of mind by the Proper Officer and the failure to seek further details if necessary from the petitioner.

Remittance and Directions:
Due to the unsustainability of the order, the court set it aside and remitted the matter to the Proper Officer for re-adjudication. The Proper Officer was directed to request any additional details/documents required from the petitioner, who must then provide explanations and documents for a fresh adjudication.

Court's Clarification:
The court clarified that it did not delve into the merits of the parties' contentions and reserved all rights and contentions. Additionally, the challenge to a specific notification was left open for future consideration.

Disposition:
The petition was disposed of with the above terms, emphasizing the need for a proper re-adjudication process by the Proper Officer in accordance with the law and within the prescribed period under the Act.