2024 (2) TMI 999 - HC - GST

Under declaration of output tax - excess claim of Input Tax Credit - impugned order is a cryptic order without adverting to any of the submissions raised by the petitioner and records that the reply was not found satisfactory - violation of principles of natural justice - HELD THAT - A perusal of the show cause notice shows that the Department has given specific details of alleged under declaration of output tax, excess claim Input Tax Credit ITC , under declaration of ineligible ITC and ITC claim from cancelled dealers, return defaulters and tax non-payers. To the said show cause notice, detailed replies were furnished by the petitioner giving full particulars under each of the heads. The impugned order, however, after recording the narration, records that the reply uploaded by the tax payer is not satisfactory. It merely states that And whereas, after analyzing, examining and evaluating the reply filed by the taxpayer and details available, as on date on the GST portal, reply of the tax payer is found to be vague and miserably fails to counter the demands mentioned in the DRC-01. - In case the GST Officer was of the view that reply was vague or further details were required, the same could have been 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 - Further petitioner was not provided with an adequate opportunity to defend the show cause notice by way of a hearing. The impugned order records that petitioner has not furnished the requisite details. The GST Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner and petitioner shall furnish the same - issue raised by the petitioner with regard to the Notification dated 31.03.2023, contravening provisions of Section 168A of the Act is left open. The impugned order dated 29.12.2023 and show cause notice dated 23.09.2023 are set aside. The matter is remitted to the GST Officer for re-adjudication after giving an opportunity of personal hearing.

Summary

Issues involved:
The judgment deals with the impugning of an order passed under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand was confirmed against the petitioner along with a penalty. The issues revolve around the adequacy of the order, the petitioner's right to defend the show cause notice, and the compliance with procedural requirements.

Adequacy of Order:
The petitioner submitted detailed replies to the show cause notice, but the impugned order was criticized for being cryptic and not addressing the petitioner's submissions adequately. The order was found to lack proper analysis and evaluation of the petitioner's responses, leading to a conclusion that the reply was unsatisfactory without providing specific reasons or requesting further clarification.

Right to Defend Show Cause Notice:
It was observed that the petitioner was not given an adequate opportunity to defend the show cause notice through a hearing. The lack of a proper hearing deprived the petitioner of the chance to present their case effectively and address any concerns raised by the tax authorities.

Compliance with Procedural Requirements:
The Department had issued a detailed show cause notice outlining specific allegations related to tax declarations, Input Tax Credit (ITC) claims, and other tax-related issues. The petitioner had responded comprehensively to each allegation, but the subsequent order failed to engage with the details provided by the petitioner. The judgment emphasized the importance of providing the taxpayer with an opportunity to clarify responses and furnish additional documents if required.

Conclusion:
The High Court set aside the impugned order and show cause notice, directing the matter to be re-adjudicated by the GST Officer after affording the petitioner an opportunity for a personal hearing. The GST Officer was instructed to communicate any necessary details or documents to the petitioner for compliance. The petitioner was granted liberty to challenge any future orders in accordance with the law and raise concerns regarding the validity of the notification dated 31.03.2023, which was left open for further examination.