2024 (5) TMI 269 - 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 - demand including penalty - HELD THAT - The impugned order, however, after recording the narration records that no satisfactory reply and no substantial documents were submitted by the taxpayer - The Proper Officer has opined that the taxpayer has not filed a satisfactory reply nor substantial documents. The observation in the impugned order dated 29.12.2023 is not sustainable for the reasons that the reply dated 23.12.2023 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 not satisfactory and no substantial documents have been submitted by the taxpayer which ex-facie shows that the 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 29.12.2023 cannot be sustained and is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication. The Proper Officer is directed to withdraw all punitive actions taken against the petitioner pursuant to impugned order dated 29.12.2023, inter-alia, blocking of credit ledger and the provisional attachment of property including bank account, if any - Petition disposed off.

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 was raised against the petitioner.

Detailed Summary:

Issue 1: Consideration of petitioner's reply
The petitioner challenged an order disposing of a Show Cause Notice proposing a demand against them. The petitioner argued that their detailed reply was not considered in the impugned order, which was deemed cryptic. The Court noted that the petitioner had responded to the Show Cause Notice with supporting documents under separate headings, but the impugned order claimed no satisfactory reply or substantial documents were submitted by the petitioner. The Court found that the Proper Officer did not adequately consider the detailed reply submitted by the petitioner, leading to the order being unsustainable.

Issue 2: Lack of opportunity for clarification
The Court observed that if the Proper Officer required further details, they should have specifically requested them from the petitioner. However, no such opportunity was given to the petitioner to clarify their reply or provide additional documents. This lack of opportunity for clarification was considered a flaw in the proceedings.

Decision:
The Court set aside the impugned order dated 29.12.2023 and remitted the Show Cause Notice to the Proper Officer for re-adjudication. All punitive actions taken against the petitioner were directed to be withdrawn, including blocking of credit ledger and provisional attachment of property. The petitioner was granted 30 days to file a further reply to the Show Cause Notice. The Proper Officer was instructed to re-adjudicate the matter, provide a personal hearing, and pass a fresh speaking order within the prescribed period under the Act. The Court clarified that it did not comment on the merits of the contentions, reserving all rights and contentions of the parties. The petition was disposed of accordingly.