2024 (5) TMI 1375 - HC - GST

Challenge to order u/s 73 of the Central Goods and Services Tax Act, 2017 - ex-parte demand is created - violation of principles of natural justice - HELD THAT - The only reason for passing the impugned order is that petitioner had not filed any reply to the Show Cause Notice. Considering the Petitioner did not have access to the portal due to the GST registration being cancelled, one more opportunity needs to be granted to the Petitioner to respond to the Show Cause Notice. The impugned order dated 28.12.2023 is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication - petition is disposed off by way of remand.

Summary

Issues involved: Impugning an order u/s 73 of the Central Goods and Services Tax Act, 2017 based on a Show Cause Notice, lack of response due to business transfer and GST registration cancellation, and demand raised against the petitioner.

Summary:

Impugned Order and Lack of Response:
The petitioner challenged an order dated 28.12.2023 based on a Show Cause Notice proposing a demand of Rs. 3,38,402.00 u/s 73 of the CGST Act. The petitioner, having transferred the business to another entity with a different GST number, did not respond to the Notice due to lack of access to the portal after business closure and GST registration cancellation on 31.08.2021.

Issues Raised in the Show Cause Notice:
The Department raised concerns in the Show Cause Notice dated 29.09.2023 regarding declaration of output tax, excess claim of Input Tax Credit (ITC), and scrutiny of ITC availed.

Judgment and Remittance for Re-adjudication:
The impugned order was set aside, and the Show Cause Notice was remitted to the Proper Officer for re-adjudication. The Court emphasized granting the petitioner one opportunity to respond to the Notice, considering the circumstances of portal inaccessibility post-GST registration cancellation.

Directions for Re-adjudication:
The petitioner was directed to file a reply to the Show Cause Notice within 30 days, following which the Proper Officer was instructed to re-adjudicate the matter, conduct a personal hearing, and issue a fresh speaking order within the prescribed period u/s 75(3) of the Act.

Clarification and Reservation of Rights:
The Court clarified that it did not assess the merits of the parties' contentions and reserved all rights and contentions. Additionally, the challenge to Notification No. 9 of 2023 regarding the initial time extension was left open.

Disposition of Petition:
The petition was disposed of in the above terms, emphasizing the need for procedural fairness and adherence to statutory provisions in the re-adjudication process.