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2024 (4) TMI 271 - HC - GSTViolation of principles of natural justice - SCN does not take into consideration the reply submitted by the Petitioner and is a cryptic order - under declaration of output tax - excess claim of ITC - ITC to be reversed on non-business transactions and exempt supplies - under declaration of ineligible ITC - ITC claimed from cancelled dealers, return defaulters and tax nonpayers - HELD THAT - The observation in the impugned order dated 30.12.2023 is not sustainable for the reasons that the reply dated 20.10.2023 filed by the Petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not satisfactory which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the Petitioner. The impugned order records the reply furnished by the Petitioner is not satisfactory. Proper Officer is directed to intimate to the Petitioner details/documents, as may be 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 challenge to Notification No. 9 of 2023 with regard to the initial extension of time is left open - Petition disposed off.
Issues involved:
The judgment deals with the disposal of a Show Cause Notice under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand including penalty was raised against the Petitioner. The main issue was the consideration of the detailed reply submitted by the Petitioner in response to the Show Cause Notice. Detailed Judgment: The Petitioner challenged an order dated 30.12.2023, disposing of the Show Cause Notice and raising a demand against the Petitioner under various headings related to tax matters. The Petitioner contended that the order did not take into account the detailed reply dated 20.10.2023 submitted by them, and was inadequately reasoned. The Show Cause Notice outlined different issues such as declaration of output tax, excess claim of Input Tax Credit (ITC), reversal of ITC on non-business transactions and exempt supplies, ineligible ITC, and ITC claimed from certain categories of dealers. The Petitioner provided a detailed reply addressing each of these issues. However, the impugned order dismissed the Petitioner's reply as unsatisfactory without proper consideration. The Court noted that the Proper Officer did not adequately assess the reply and merely stated it was not satisfactory, indicating a lack of proper evaluation. Furthermore, the Court found that the Proper Officer did not seek further details or documents from the Petitioner before deeming the reply unsatisfactory. This lack of opportunity for clarification or additional submission rendered the order unsustainable. 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 specific details or documents required from the Petitioner for a fresh assessment. The Petitioner would then have the opportunity to provide necessary explanations and documents before a new decision is made within the prescribed period. The Court clarified that it did not delve into the merits of the parties' contentions and reserved all rights and contentions. Additionally, the challenge to a specific notification was left open for future consideration. In conclusion, the petition was disposed of with the above directions for re-adjudication by the Proper Officer.
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