2024 (5) TMI 1311 - 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 - order u/s 73 of the Central Goods and Services Tax Act 2017 - HELD THAT - The impugned order however after recording the narration records that the reply uploaded by the taxpayer devoid of merits without any justification. The observation in the impugned order dated 21.03.2023 is not sustainable for the reasons that the reply dated 11.01.2024 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 devoid of merits without any justification which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. The impugned order dated 21.03.2024 cannot be sustained and is set aside. The show cause notice is remitted to the Proper Officer for re-adjudication - Petition disposed off.

Summary

Issues involved: Impugning an order u/s 73 of the Central Goods and Services Tax Act, 2017 regarding a demand raised against the petitioner.

Summary:
The petitioner challenged an order dated 21.03.2024 disposing of a Show Cause Notice dated 11.12.2023 proposing a demand of Rs 3,50,60,125.00 against them u/s 73 of the Act. The petitioner contended that their detailed reply was not considered in the impugned order, which raised issues under various headings such as declaration of output tax, excess claim of Input Tax Credit (ITC), scrutiny of ITC availed, ITC to be reversed on non-business transaction and exempt supplies, and declaration of ineligible ITC. Despite the petitioner's detailed reply with supporting documents, the Proper Officer upheld the demand stating the reply was devoid of merits without justification, without considering it properly. The court found the order unsustainable as the Proper Officer did not apply their mind to the petitioner's reply and set aside the order, remitting the Show Cause Notice for re-adjudication. The petitioner was given 30 days to file a further reply, and the Proper Officer was directed to pass a fresh speaking order within the prescribed period u/s 75(3) of the Act, ensuring a personal hearing opportunity.

This judgment highlights the importance of proper consideration of submissions and adherence to principles of natural justice in tax matters, emphasizing the need for detailed examination before upholding demands or passing adverse orders.