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2024 (5) TMI 46 - HC - GSTViolation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - HELD THAT - The impugned order, however, after recording the narration records that no proper reply/ explanation have been received from the Taxpayer. It states that And whereas, the Taxpayer was allowed opportunity to explain Tax deficiencies during Personal Hearing before Proper Officer on the given date and time - The Proper Officer has opined that no proper reply/explanation has been received from the Taxpayer. The observation in the impugned order dated 31.12.2023 is not sustainable for the reasons that the reply dated 20.10.2023 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 no proper reply/explanation has been received which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. 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 of by way of remand.
Issues involved: Impugning an order under Section 73 of the Central Goods and Services Tax Act, 2017 for demand and penalty.
The petitioner challenged an order disposing of a Show Cause Notice proposing a demand of Rs. 17,89,56,282.00 against them under Section 73 of the CGST Act. The petitioner contended that their detailed reply was not considered in the cryptic order. The Department had raised various issues in the Show Cause Notice, to which the petitioner had responded with disclosures under each head. However, the impugned order stated that no proper reply or explanation was received, leading to the demand being raised. The court found that the Proper Officer did not adequately consider the petitioner's detailed reply and remitted the matter for re-adjudication, allowing the petitioner to file a further reply within 30 days. The Court clarified that it did not comment on the merits of the contentions of either party, reserving all rights and contentions. In the detailed reply to the Show Cause Notice, the petitioner provided explanations and supporting documents for the issues raised by the Department. Despite this, the impugned order concluded that no proper reply or explanation was received from the taxpayer. The Court noted that the Proper Officer did not appear to have applied their mind to the petitioner's response, as the order did not reflect a consideration of the detailed reply submitted. Additionally, the Court observed that the petitioner was not given an opportunity to clarify or provide further details if needed. Consequently, the impugned order was deemed unsustainable, and the matter was directed to be remitted for re-adjudication by the Proper Officer. The Court found that the Proper Officer's opinion, as reflected in the impugned order, did not adequately address the detailed reply submitted by the petitioner. Despite the petitioner's comprehensive response with supporting documents, the order simply stated that no proper reply or explanation was received. The Court emphasized the importance of the Proper Officer considering the merits of the reply before forming an opinion. Furthermore, the Court highlighted that if additional details were required, the Proper Officer should have specifically requested them from the petitioner, which was not evident in the record. As a result, the Court set aside the impugned order and directed the matter to be re-adjudicated after the petitioner files a further reply within the specified timeline.
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