2024 (3) TMI 337 - 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 28.12.2023 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 disposal of an impugned Show Cause Notice dated 23.09.2023, proposing a demand against the petitioner under Section 73 of the Central Goods and Services Tax Act, 2017.

Detailed Summary:

Issue 1: Consideration of Petitioner's Reply
The petitioner challenged the order dated 28.12.2023, claiming that their detailed reply to the Show Cause Notice was not considered adequately. The Department had categorized the issues under different headings such as excess claim Input Tax Credit, under declaration of ineligible ITC, and ITC claim from canceled dealers, return defaulters, and tax non-payers. Despite the petitioner providing full disclosures under each heading, the impugned order dismissed the reply as unsatisfactory without proper consideration.

Issue 2: Lack of Proper Assessment
The impugned order concluded that the petitioner's reply was unsatisfactory without providing specific reasons or seeking further clarification. The court noted that the Proper Officer did not assess the reply on its merits and failed to request additional details if deemed necessary. This lack of proper assessment led to the decision to create a demand ex-parte, which was deemed unjustified.

Issue 3: Remittal for Re-adjudication
Due to the deficiencies in the assessment process, the court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication. The Proper Officer was directed to communicate the specific details/documents required from the petitioner, who would then have the opportunity to provide explanations and documents. The re-adjudication process was to include a personal hearing and the issuance of a fresh speaking order in accordance with the law.

Additional Notes:
The judgment clarified that the court did not delve into the merits of the parties' contentions and reserved all rights and contentions. Furthermore, the challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open. Ultimately, the petition was disposed of in the terms outlined above.