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2024 (3) TMI 1090 - HC - GSTViolation of principles of natural justice - impugned order does not take into consideration the replies submitted by the Petitioner and is a cryptic order - demand with penalty u/s 73 of CGST Act - HELD THAT - The observation in the impugned order dated 30.12.2023 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 exfacie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner - Further, if the Proper Officer was of the view that further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details. The order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 29.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication. Petition disposed off.
Issues:
The judgment involves the challenge to an order passed under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand including penalty was raised against the Petitioner based on a Show Cause Notice. Detailed Summary: 1. The Petitioner contested the order dated 30.12.2023, which disposed of the Show Cause Notice dated 22.09.2023, proposing a demand of Rs. 1,96,12,996.10 against the Petitioner. The Petitioner argued that despite submitting detailed replies to the Show Cause Notice, the impugned order did not consider these replies and was cryptic in nature. 2. The Petitioner had responded to the Reminder Notice and the Show Cause Notice with detailed replies, but the impugned order did not take these into account. The Petitioner's counsel highlighted the discrepancy between the submissions made by the Petitioner and the observations in the order. 3. The Show Cause Notice had distinct headings related to excess claim Input Tax Credit (ITC), scrutiny of ITC availed, and ITC claimed from specific categories. The Petitioner provided comprehensive disclosures under each of these heads in response to the Notice. 4. The impugned order, however, dismissed the Petitioner's replies as devoid of merits without a thorough examination. The Proper Officer's opinion that the reply lacked substance was challenged as it appeared that the Officer did not properly assess the content of the Petitioner's submissions. 5. The Court found that the Proper Officer did not adequately consider the detailed reply provided by the Petitioner and merely concluded that it lacked merit. This failure to engage with the Petitioner's submissions led to the order being unsustainable. 6. It was noted that if the Proper Officer required further details or clarifications, they should have been explicitly requested from the Petitioner. However, there was no evidence that such an opportunity was given before upholding the demand and penalty against the Petitioner. 7. Consequently, the Court held that the impugned order was not tenable and directed the matter to be sent back to the Proper Officer for re-adjudication. The order dated 30.12.2023 was set aside, and the Proper Officer was instructed to reassess the Show Cause Notice after providing the Petitioner with an opportunity for a personal hearing. 8. The Proper Officer was directed to communicate the specific details or documents required from the Petitioner for re-adjudication. The Petitioner was to furnish the necessary explanations and documents as requested, following which the Proper Officer would issue a fresh order within the prescribed period under Section 75(3) of the Act. 9. The Court clarified that it did not delve into the merits of the parties' contentions and reserved all rights and contentions for future proceedings. 10. The petition was disposed of with the above directions for re-adjudication by the Proper Officer.
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