2024 (5) TMI 970 - HC - GST

Violation of principles of natural justice - ex-parte demand created - failure to respond to SCN - Lack of communication regarding proceedings - order passed u/s 73 of the Central Goods and Services Tax Act, 2017 - HELD THAT - The petitioner did not access the portal due to closure of business and could not reply to the said Show Cause Notice. Since the only reason for passing the impugned order is that petitioner had not filed any reply/explanation, one opportunity needs to be granted to the petitioner to respond to the Show Cause Notice and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 21.12.2023 is set aside. The Show Cause Notice is restored on the record of the Adjudicating Authority. Petitioner shall file a further reply to the Show Cause Notice within two weeks from today. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act. Petition disposed off.

Summary

Issues involved: Impugned order u/s 73 of the Central Goods and Services Tax Act, 2017; Failure to respond to Show Cause Notice; Demand raised against petitioner; Lack of communication regarding proceedings.

Judgment Summary:

Impugned Order u/s 73 CGST Act:
The petitioner challenged an order disposing of a Show Cause Notice proposing a demand of Rs 10,85,557.20 u/s 73 of the CGST Act. The petitioner had closed their business and was unaware of the proceedings as the SCN was only uploaded on the portal, not communicated through other means. The order created a demand ex-parte due to the petitioner's failure to respond.

Failure to Respond to SCN:
The impugned order noted the taxpayer's failure to file a reply/explanation or appear for a Personal Hearing despite opportunities provided. The Proper Officer decided to create a demand ex-parte as the taxpayer did not respond, leading to the order being set aside for lack of reply/explanation.

Remittal for Re-adjudication:
Due to the petitioner's inability to access the portal post-business closure, the Court decided to remit the matter to the Proper Officer for re-adjudication. The Show Cause Notice was restored, and the petitioner was directed to file a reply within two weeks for re-adjudication with a fresh speaking order.

Final Disposal:
The Court clarified that it did not comment on the merits of the parties' contentions, reserving all rights and contentions. The petition was disposed of with the directive for re-adjudication of the Show Cause Notice within the prescribed period u/s 75(3) of the Act.