2024 (6) TMI 286 - HC - GST

Violation of principles of natural justice - impugned order does not take into consideration the replies submitted by the Petitioner and is a cryptic order - order u/s 73 of CGST Act - HELD THAT - Perusal of the Show Cause Notice dated 29.01.2024 shows that the Department has simply enclosed the findings of the Special Audit conducted by Auditors as per Section 66 of the Act. and no further reasons were given in the said Show Cause Notice. The observation in the impugned order dated 30.04.2024 is not sustainable for the reasons that the reply dated 21.03.2024 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 not satisfactory which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details - the impugned order dated 30.04.2024 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: Impugning an order u/s 73 of the Central Goods and Services Tax Act, 2017 regarding a demand created against the petitioner for Financial Year 2018-19 based on a Show Cause Notice dated 29.01.2024.

The petitioner challenged an order dated 30.04.2024 that disposed of a Show Cause Notice proposing a demand of Rs. 23,82,40,692.00 against the petitioner for the Financial Year 2018-19 u/s 73 of the Central Goods and Services Tax Act, 2017. The petitioner contended that the order did not consider the detailed reply submitted on 21.03.2024 and was cryptic in nature. Additionally, it was argued that the Show Cause Notice lacked proper application of mind as the Special Audit Report findings were mechanically included without proper assessment. The Department enclosed the Special Audit findings in the Show Cause Notice without providing further reasons. The petitioner submitted a detailed reply with supporting documents addressing each finding, but the impugned order deemed the reply unsatisfactory without proper consideration, leading to the conclusion that the Proper Officer did not apply his mind adequately. The Court held that the order was unsustainable as the Proper Officer failed to assess the reply on its merits and did not seek further details from the petitioner if needed. Consequently, the impugned order was set aside, and the Show Cause Notice was remitted for re-adjudication. The petitioner was granted 30 days to file a further reply, after which the Proper Officer was directed to re-adjudicate the matter, provide a personal hearing, and pass a fresh speaking order within the prescribed period. The Court clarified that it did not comment on the merits of the case, and all rights and contentions of the parties were reserved. The challenge to certain notifications regarding time extensions was left open, and the petition was disposed of accordingly.