2024 (4) TMI 1002 - HC - GST

Validity Of Order passed u/s 73 - Proper Officer not applied his mind - excess claim Input Tax Credit ITC - demand - Penalty - HELD THAT - Perusal of the Show Cause Notice dated 24.09.2023 shows that the Department has given separate headings i.e., excess claim Input Tax Credit ITC ; scrutiny of ITC availed on reverse charge; ITC to be reversed on non-business transactions exempt supplies; and under declaration of ineligible ITC. 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 30.12.2023 is not sustainable for the reasons that the reply dated 17.10.2023 filed by the Petitioner is a detailed reply with supporting documents. 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. Thus, the impugned order dated 30.12.2023 cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Petition is disposed of in the above terms.

Summary

Issues involved: Impugning order disposing Show Cause Notice u/s 73 of CGST Act, 2017 without considering petitioner's reply.

Summary:
The petitioner challenged an order dated 30.12.2023, which disposed of the Show Cause Notice dated 24.09.2023, proposing a demand of Rs. 88,34,701.00 against the petitioner under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner contended that their detailed reply dated 17.10.2023 was not considered, and the impugned order was cryptic. The Show Cause Notice had various headings, and a detailed reply was provided by the petitioner under each head. However, the impugned order stated the reply was unsatisfactory without proper consideration of the submitted documents. The court held that the Proper Officer did not apply his mind to the reply and did not seek further details from the petitioner if needed. Consequently, the impugned order was set aside, and the matter was remitted to the Proper Officer for re-adjudication. The petitioner was directed to file a reply within 30 days, and the Proper Officer was instructed to pass a fresh order after giving a personal hearing within the prescribed period under Section 75(3) of the Act. The Court clarified that it did not comment on the merits of the contentions, and all rights of the parties were reserved. The challenge to Notification No. 9 of 2023 regarding the initial time extension was left open, and the petition was disposed of accordingly.