2024 (4) TMI 287 - HC - GST

Violation of principles of natural justice - cryptic order - excess claim Input Tax Credit - under declaration of ineligible ITC - ITC claimed from cancelled dealers - return defaulters and tax nonpayers - HELD THAT - The observation in the impugned order dated 26.12.2023 is not sustainable for the reasons that the reply dated 19.10.2023 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 nor any substantial documents were submitted by the taxpayer 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 as incomplete, not supported by adequate documents, unclear and unsatisfactory. Proper Officer is directed to intimate to the petitioner if any 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. Petition disposed off.

Summary

Issues involved: Impugned order disposing of Show Cause Notice under Section 73 of the Central Goods and Services Tax Act, 2017 without considering detailed reply of the Petitioner.

Summary:
The Petitioner challenged an order dated 26.12.2023 which disposed of a Show Cause Notice proposing a demand of Rs. 20,07,15,517.00 against the Petitioner under Section 73 of the CGST Act. The Petitioner contended that their detailed reply dated 19.10.2023 was not considered in the impugned order and was termed as incomplete. The Show Cause Notice included various headings such as excess claim Input Tax Credit, under declaration of ineligible ITC, and ITC claimed from cancelled dealers. The Petitioner provided a detailed reply under each head. However, the impugned order stated that the reply was incomplete, not supported by adequate documents, and unsatisfactory. The Court held that the Proper Officer did not properly consider the detailed reply submitted by the Petitioner. The Court found that the order was not sustainable as the Proper Officer did not apply his mind to the reply. The matter was remitted to the Proper Officer for re-adjudication, directing the Officer to seek any further details required from the Petitioner and to pass a fresh speaking order after giving an opportunity for a personal hearing.

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 accordingly.