2024 (3) TMI 1094 - HC - GST

Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - demand including 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 incomplete. He merely held that the reply is incomplete and lacks supporting documents which ex-facie 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 any 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 30.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication. Petition disposed off.

Summary

Issues involved:
The impugned order under Section 73 of the Central Goods and Services Tax Act, 2017, disposing of a Show Cause Notice proposing a demand against the Petitioner without considering the detailed reply submitted by the Petitioner.

Detailed Judgment:
The Petitioner challenged an order dated 30.12.2023, which disposed of a Show Cause Notice proposing a demand against the Petitioner under Section 73 of the CGST Act, 2017. The Petitioner contended that despite filing a detailed reply on 29.12.2023, the impugned order did not take into consideration the reply and was cryptic in nature. The Department had raised issues regarding excess claim Input Tax Credit, ITC to be reversed on non-business transactions and exempt supplies, under declaration of ineligible ITC, and ITC claimed from cancelled dealers, return defaulters, and tax nonpayers. The Petitioner had provided a detailed reply addressing each of these issues. However, the impugned order deemed the reply incomplete and lacking supporting documents without proper consideration. The Court held that the Proper Officer did not adequately assess the reply and failed to request further details from the Petitioner if needed. Consequently, 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 any required details/documents to the Petitioner for furnishing explanations and documents, followed by re-adjudication and a fresh speaking order within the prescribed period. The Court clarified that it did not delve into the merits of the parties' contentions, reserving all rights and contentions. Ultimately, the petition was disposed of accordingly.