2024 (3) TMI 1128 - 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 - 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 not duly supported by adequate documents and unsatisfactory. He merely held that the reply is not clear and unsatisfactory 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 the reply is incomplete not duly supported by adequate documents and unsatisfactory if further any 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 impugned order records that petitioner s reply is not clear unsatisfactory incomplete and not duly supported by adequate documents. 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. 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.

Summary

Issues:
The judgment involves the challenge to an order dated 30.12.2023 under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand of Rs. 2,18,73,860.00 including penalty was raised against the petitioner. The issues include the consideration of a detailed reply by the petitioner to the Show Cause Notice, the alleged defects in the Show Cause Notice itself, and the adequacy of the Proper Officer's assessment of the petitioner's reply.

Consideration of Detailed Reply:
The petitioner submitted a detailed reply dated 17.11.2023 to the Show Cause Notice, addressing various headings provided by the Department. However, the impugned order dated 30.12.2023 dismissed the reply as unclear and unsatisfactory without proper consideration. The Proper Officer's opinion that the reply was incomplete and unsupported by adequate documents was deemed unsustainable as it did not reflect a thorough assessment of the petitioner's submissions. The Court held that the matter should be remitted to the Proper Officer for re-adjudication, emphasizing the need for a fair review of the petitioner's response.

Defects in Show Cause Notice:
The petitioner contended that the Show Cause Notice itself was defective as it was unsigned and the limitation had expired. Despite these alleged deficiencies, the petitioner provided a detailed reply addressing the various issues raised in the Notice. The Court did not find any reflection in the record that the Department had sought further details or documents from the petitioner to clarify any perceived inadequacies in the response. The Court directed the Proper Officer to communicate any specific requirements to the petitioner for furnishing additional details/documents and to conduct a re-adjudication process with a fresh speaking order.

Additional Reply Filing and Conclusion:
The Court allowed the petitioner to file an additional reply within one week and clarified that it had not expressed any opinion on the merits of the contentions raised by either party. The judgment also left open the challenge to Notification No. 9 of 2023 regarding the initial extension of time. Ultimately, the petition was disposed of with the directions for re-adjudication and a fair assessment of the petitioner's submissions.

Judge's Separate Judgment:
No separate judgment was delivered by the judges in this case.