2024 (4) TMI 522 - 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 - excess claim of Input Tax Credit (ITC) - under declaration of ineligible ITC - ITC claimed from cancelled dealers - return defaulters and tax non payers - HELD THAT - The observation in the impugned order dated 31.12.2023 is not sustainable for the reasons that the reply dated 26.10.2023 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 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 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 impugned order dated 31.12.2023 cannot be sustained and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly the impugned order dated 31.12.2023 is set aside and the matter is remitted to the Proper Officer for re-adjudication - petition disposed off by way of remand.

Summary

Issues Involved:
The judgment deals with the impugning of an order under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand including penalty was raised against the Petitioner based on a Show Cause Notice.

Detailed Judgment:

Issue 1: Consideration of Petitioner's Reply
The Petitioner challenges the order dated 31.12.2023, claiming that the order did not consider the detailed reply submitted by the Petitioner on 26.10.2023. The Petitioner argues that the order was cryptic and did not take into account the disclosures made under different headings in response to the Show Cause Notice.

Issue 2: Adequacy of Petitioner's Reply
The impugned order deemed the Petitioner's reply as insufficient and unsatisfactory without providing specific reasons or requesting further details from the Petitioner. The Court held that the Proper Officer did not properly evaluate the reply submitted by the Petitioner, as evident from the generic statement of dissatisfaction without detailed analysis.

Issue 3: Lack of Opportunity for Clarification
The Court noted that the Proper Officer failed to give the Petitioner an opportunity to clarify or supplement the reply with additional documents or details if deemed necessary. The absence of such a chance to provide further information rendered the decision unsustainable.

Resolution:
The Court set aside the impugned order dated 31.12.2023 and remitted the matter to the Proper Officer for re-adjudication. The Petitioner was directed to file a reply to the Show Cause Notice within 30 days, following which the Proper Officer was instructed to re-adjudicate the matter, provide a personal hearing opportunity, and pass a fresh speaking order within the prescribed period under Section 75(3) of the Act.

Final Remarks:
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 Notification No. 9 of 2023 regarding the initial extension of time was left open. The petition was disposed of accordingly.