2024 (5) TMI 656 - HC - GST

Validity of assessment order - SCN was issued based on Audit observations - The contents of impugned order and are identical to the conclusions recorded in the show cause notice and in the earlier audit observations - Revenue submitted that petitioner did not enclose necessary documents while objecting to the audit objections or responding to the show cause notice - violation of principles of natural justice - HELD THAT - The adjudication process would be robbed of meaning unless the authority undertaking adjudication acts in an objective manner without predetermining the issues arising for consideration. Since adjudication was not undertaken in such manner, the impugned order cannot be sustained. However, it shall be treated as a show cause notice and responded to. The impugned order be treated as a show cause notice. The petitioner is permitted to submit a reply thereto within 15 days from the date of receipt of a copy of this order. Upon receipt of such reply, the second respondent is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner's reply after duly taking note of the observations set out in this order. Petition disposed off.

Summary

Issues Involved:
The issues involved in the judgment are the challenge to an order dated 29.12.2023 in a writ petition following an audit of the petitioner's books of account, objections raised by the petitioner in relation to audit observations, issuance of intimation in Form GST DRC-01, a show cause notice, and the language used in the impugned order compared to the show cause notice and audit observations.

Audit Observations and Show Cause Notice:
The petitioner raised objections to audit observations which were not accepted, leading to the issuance of an intimation followed by a show cause notice. The petitioner contended that the language in the show cause notice mirrored the audit observations, indicating predetermination. The Court referred to the ORYX Fisheries case and emphasized the need for a reasonable opportunity to respond to show cause notices. The impugned order contained identical conclusions to the show cause notice and audit observations, without considering the petitioner's replies.

Contentions of the Parties:
The learned counsel for the petitioner highlighted discrepancies between the intimation, show cause notice, and impugned order, alleging predetermination. The Additional Government Pleader argued that the petitioner failed to enclose necessary documents while responding to the show cause notice, resulting in the confirmation of the tax proposal. He suggested treating the impugned order as a show cause notice if the Court intervenes.

Defects and Conclusions:
The show cause notice and impugned order addressed six defects, with defect No.1 illustrating the issue. The conclusions in both documents were identical, indicating a lack of consideration for the petitioner's responses. The Court noted that the language used in both documents was the same, suggesting a conversion of audit observations into the show cause notice and final order without due regard to the petitioner's submissions.

Judicial Decision and Directions:
The Court emphasized the importance of an objective adjudication process without predetermination. As the impugned order did not meet this standard, it was directed to be treated as a show cause notice. The petitioner was granted 15 days to respond, following which the authority was instructed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed accordingly.