2024 (3) TMI 57 - 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 which merely records that reply was found not satisfactory and devoid of merits - under declaration of output tax, excess claim Input Tax Credit ITC , under declaration of ineligible ITC - ITC claim from cancelled dealers, return defaulters and tax non-payers - demand alongwith penalty - HELD THAT - Proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that no proper reply/explanation has been received which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner - Further, if the Proper Officer was of the view that reply is incomplete and 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. The order cannot be sustained and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 29.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication - petition disposed off.

Summary

Issues involved:
The judgment involves the challenge against an order confirming a demand under Section 73 of the Central Goods and Services Tax Act, 2017, based on a show cause notice alleging under declaration of output tax, excess claim Input Tax Credit, and other related issues.

Detailed Summary:

Issue 1: Consideration of petitioner's reply in the impugned order
The petitioner challenged the order dated 29.12.2023, contending that their detailed reply to the show cause notice was not considered, leading to a demand of Rs. 11,12,004.60/- including penalty. The petitioner argued that the order did not take into account their reply and merely stated it was unsatisfactory without proper consideration.

Issue 2: Adequacy of petitioner's reply and proper officer's assessment
The petitioner had provided a detailed reply to the show cause notice, disclosing information under each alleged head of tax default. However, the impugned order dismissed the reply as unsatisfactory without proper assessment. The court noted that the proper officer did not seem to have adequately reviewed the petitioner's explanation before concluding it was insufficient.

Issue 3: Lack of opportunity for clarification or further details
The court observed that if the proper officer deemed the petitioner's reply incomplete, they should have provided an opportunity for clarification or additional details. However, no such opportunity was extended to the petitioner, indicating a lack of procedural fairness in the assessment process.

Conclusion:
The court found the impugned order unsustainable due to the failure to properly consider the petitioner's detailed reply. Consequently, the matter was remitted to the Proper Officer for re-adjudication, directing them to seek necessary details from the petitioner and provide a fair opportunity for explanation. The court clarified that it did not delve into the merits of the case and reserved all rights and contentions of the parties. Additionally, the challenge to Notification No. 9 of 2023 was left open, and the petition was disposed of accordingly.