2024 (5) TMI 1386 - HC - GST

Demand with penalty u/s 73 of the Central Goods and Services Tax Act, 2017 - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - violation of principles of natural justice - HELD THAT - The principal grounds for creating the demand is that taxpayer has not uploaded supporting documents in respect of cancelled dealer despite sufficient opportunity being given. However, it may be noticed that petitioner had uploaded several documents as well as details of transactions done with the cancelled dealer - As per the petitioner the transactions were bona fide and genuine and were carried out when the registration was valid. The registration of the dealer has been cancelled subsequently retrospectively. The observation in the impugned order dated 24.04.2024 is not sustainable for the reasons that the reply dated 04.04.2024 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 taxpayer has not uploaded supporting documents in respect of cancelled dealer which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. The impugned order dated 24.04.2024 cannot be sustained and is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication - Petition disposed off by way of remand.

Summary

Issues involved: Impugned order u/s 73 of the Central Goods and Services Tax Act, 2017; Proper consideration of petitioner's reply; Demand creation based on lack of uploaded documents for cancelled dealer.

Impugned Order Consideration: The petitioner challenged an order disposing of a Show Cause Notice proposing a demand of Rs. 2,87,99,294.00 u/s 73 of the Act. The petitioner contended that the order did not consider their detailed reply submitted earlier.

Show Cause Notice Response: The Department raised grounds under separate headings including excess claim of ITC, non-reconciliation of information, and ITC from cancelled dealers. The petitioner provided a detailed reply with supporting documents addressing each of these grounds.

Lack of Uploaded Documents: The impugned order stated that the taxpayer did not upload supporting documents for a cancelled dealer despite opportunities given. However, the petitioner had indeed uploaded various documents and transaction details related to the cancelled dealer.

Sustainability of Order: The Court found the observation in the impugned order unsustainable as the Proper Officer did not properly consider the detailed reply with supporting documents submitted by the petitioner. The Officer failed to apply his mind to the reply.

Proper Consideration Required: The Court noted that if further details were needed, the Officer should have specifically requested them from the petitioner. However, no such opportunity was given, leading to the setting aside of the impugned order for re-adjudication.

Remittal and Further Action: The Show Cause Notice was remitted to the Proper Officer for re-adjudication. The petitioner was granted 30 days to file a further reply, after which the Officer must re-adjudicate with a personal hearing and issue a fresh speaking order within the prescribed period.

Final Disposition: The Court clarified that it did not comment on the merits of the parties' contentions and reserved all rights and contentions. The petition was disposed of accordingly.