2024 (3) TMI 338 - HC - GST

Violation of principles of natural justice - case of petitioner is that the impugned order does not take into consideration the reply submitted by the petitioner and is a cryptic order - demand including penalty - HELD THAT - Perusal of the Show Cause Notice shows that the Department has given separate headings 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 nonpayers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving full disclosures under each of the heads. The impugned order, however, after recording the narration, records that the reply uploaded by the taxpayer is not satisfactory - The observation in the impugned order dated 27.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was devoid of merits. He merely held that the reply is devoid of merits which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. The impugned order records that petitioner has not furnished the requisite details. Proper Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner. Pursuant to the intimation being given, petitioner shall furnish the requisite explanation and documents. Thereafter, the Proper Officer shall re-adjudicate the show cause notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act - matter is remitted to the Proper Officer for re-adjudication. Petition disposed off.

Summary

Issues involved:
The judgment involves the challenge to an order passed under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand of Rs. 3,09,18,988.00 including penalty was raised against the petitioner based on a Show Cause Notice dated 23.09.2023.

Detailed Judgment:

1. Consideration of Detailed Reply:
The petitioner challenged the order dated 27.12.2023, contending that the said order did not take into consideration the detailed reply filed by the petitioner in response to the Show Cause Notice. The petitioner argued that the order was cryptic and failed to address the disclosures made in the reply.

2. Unsatisfactory Findings in the Order:
The Show Cause Notice had separate headings under various tax declarations, to which the petitioner responded with a detailed reply on 23.10.2023. However, the impugned order dismissed the reply as unsatisfactory without providing specific reasons or considering the content of the petitioner's response. This lack of detailed examination by the Proper Officer was deemed unsustainable.

3. Lack of Opportunity for Clarification:
The judgment highlighted that the Proper Officer did not request further details or documents from the petitioner if deemed necessary. The failure to provide an opportunity for clarification or additional submissions before passing the order was considered a procedural flaw.

4. Remittal for Re-adjudication:
In light of the above issues, the High Court set aside the impugned order dated 27.12.2023 and remitted the matter to the Proper Officer for re-adjudication. The Proper Officer was directed to seek any required details/documents from the petitioner, allow for explanations, conduct a fresh adjudication with a personal hearing, and issue a new order within the prescribed period under the Act.

5. Reservation of Rights and Contentions:
The Court clarified that it did not delve into the merits of the parties' contentions and reserved all rights and contentions for future proceedings. The judgment solely focused on the procedural irregularities in the adjudication process.

6. Challenge to Notification:
The judgment left open the challenge to Notification No. 9 of 2023 regarding the initial extension of time, indicating that this specific issue was not addressed in the current disposition.

7. Disposal of Petition:
Ultimately, the petition was disposed of in the above terms, emphasizing the need for a fair and thorough re-adjudication process by the Proper Officer in compliance with the law.