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2024 (4) TMI 948 - HC - GSTValidity Of Order passed u/s 73 - Show Cause Notice issued proposing a demand - Penalty - excess claim Input Tax Credit ITC - No opportunity granted to file reply - HELD THAT - Perusal of the Show Cause Notice dated 24.09.2023 shows that the Department has given separate headings i.e., under declaration of output tax; the tax on outward supplies under declared on reconciliation of data in GSTR-09; excess claim Input Tax Credit ITC ; Scrutiny of ITC availed and ITC claimed from cancelled dealers, return defaulters tax non payers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving disclosures under each of the heads. The observation in the impugned order dated 28.12.2023 is not sustainable for the reasons that the reply dated 11.10.2023 (uploaded on portal on 24.10.2023) 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. Thus, the impugned order dated 28.12.2023 cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 28.12.2023 is set aside and the matter is remitted to the Proper Officer for re-adjudication. It is clarified that this Court has neither considered nor commented upon the merits of the contentions of either party.
Issues involved: Impugned order under Section 73 of CGST Act, 2017
The petitioner challenged an order dated 28.12.2023, which disposed of a Show Cause Notice proposing a demand of Rs. 34,51,018.00 under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner contended that the order did not consider the detailed reply submitted earlier and raised a demand including penalty against the petitioner. Details of the Judgment: The petitioner had filed a detailed reply dated 11.10.2023, but the impugned order dated 26.12.2023 did not take it into consideration, leading to the petitioner's dissatisfaction. The petitioner's Chartered Accountant had tendered documents to the proper officer, but they were declined, prompting a request for an opportunity to submit a further reply with supporting documents. The Show Cause Notice dated 24.09.2023 outlined various issues such as declaration of output tax, tax on outward supplies, excess claim Input Tax Credit (ITC), and scrutiny of ITC availed. The petitioner provided a detailed reply addressing each of these issues. However, the impugned order deemed the reply unsatisfactory without proper consideration. The Court found that the Proper Officer did not adequately consider the detailed reply submitted by the petitioner. The order failed to demonstrate that the Proper Officer had applied his mind to the petitioner's submissions. Moreover, no opportunity was given to the petitioner to clarify or provide further details as needed. Consequently, the impugned order dated 28.12.2023 was set aside, and the matter was remitted to the Proper Officer for re-adjudication. The petitioner was directed to file a reply to the Show Cause Notice within one week for re-adjudication, including an opportunity for a personal hearing and a fresh speaking order in accordance with the law. The Court clarified that it did not delve into the merits of the parties' contentions and reserved all rights and contentions for the parties. Additionally, the challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open. The petition was disposed of accordingly.
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