2024 (4) TMI 214 - HC - GST

Violation of principles of natural justice - the impugned order does not take into consideration the reply submitted by the petitioner and is a cryptic order - under declaration of output tax - excess claim Input Tax Credit ITC - ITC claimed from cancelled dealers - returns defaulters and Tax non-payers - 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 unsatisfactory, incomplete and not duly supported by adequate documents. He merely held that the reply is not duly supported by adequate documents, 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 not clear and unsatisfactory and if 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 matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 30.12.2023 is set aside - Petition allowed by way of remand.

Summary

Issues Involved:
The judgment involves the challenge to an order passed u/s 73 of the Central Goods and Services Tax Act, 2017, where a demand of Rs. 2,23,79,924.00 was raised against the petitioner. The issues include consideration of detailed replies submitted by the petitioner, the sustainability of the impugned order, and the requirement for proper adjudication by the Proper Officer.

Detailed Summary:

Issue 1: Consideration of Detailed Replies
The petitioner challenged the order dated 30.12.2023, raising a demand against them. The petitioner had submitted detailed replies to the Show Cause Notice, providing full disclosures under each heading mentioned in the notice. However, the impugned order did not adequately consider the replies submitted by the petitioner, deeming them incomplete and unsatisfactory without proper justification.

Issue 2: Sustainability of the Impugned Order
The impugned order, while acknowledging the replies submitted by the petitioner, concluded that they were not duly supported by adequate documents and were unsatisfactory. The Proper Officer opined that the reply was incomplete and unable to clarify the issue. The petitioner argued that the Proper Officer did not apply his mind to the detailed reply provided, and no opportunity was given to clarify or furnish further details/documents.

Issue 3: Requirement for Proper Adjudication
The Court found that the impugned order was not sustainable due to the lack of proper consideration of the petitioner's detailed replies. It was held that the matter needed to be remitted to the Proper Officer for re-adjudication. The Proper Officer was directed to intimate the petitioner about any required details/documents and allow them to furnish explanations and documents. A fresh speaking order was to be passed within the prescribed period under Section 75(3) of the Act.

Conclusion:
The Court clarified that it did not comment on the merits of the contentions of either party and reserved all rights and contentions. The challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open. The petition was disposed of with the direction for re-adjudication by the Proper Officer in accordance with the law.

This summary provides a detailed overview of the judgment, highlighting the key issues and the Court's decision regarding each issue involved in the case.