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2024 (7) TMI 1508 - HC - GSTViolation of priniciples of natural justice - Petitioner had filed a detailed reply however, the impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - excess claim Input Tax Credit (ITC) - under declaration of ineligible ITC - ITC claimed from cancelled dealers - return defaulters and tax nonpayers - HELD THAT - The observation in the impugned order dated 28.12.2023 is not sustainable for the reasons that the reply dated 23.10.2023 filed by the Petitioner is a detailed reply. 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 nor any substantial documents were submitted by the taxpayer 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 order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 28.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication - Petition disposed off by way of remand.
Issues:
Impugned order disposing of Show Cause Notice and raising a demand against the Petitioner under Section 73 of the CGST Act, 2017 without considering the detailed reply filed by the Petitioner. Analysis: The Petitioner challenged an order dated 28.12.2023 that disposed of a Show Cause Notice proposing a demand of Rs. 5,17,43,004.00 against the Petitioner under Section 73 of the Central Goods and Services Tax Act, 2017. The Petitioner contended that despite filing a detailed reply on 23.10.2023, the impugned order did not consider the reply and was cryptic. The Show Cause Notice had detailed headings regarding Input Tax Credit, under-declaration of ineligible ITC, and ITC claimed from certain categories. The Petitioner had furnished a detailed reply under each heading, but the impugned order stated that the reply was unsatisfactory and lacked substantial documents. The Proper Officer opined that the taxpayer did not appear for a personal hearing and did not submit satisfactory documents, leading to the decision to create a demand. However, the Court found that the Proper Officer did not adequately consider the detailed reply submitted by the Petitioner. The Court held that if further details were required, they should have been specifically sought from the Petitioner, which was not done in this case. The Court concluded that the impugned order was not sustainable as the Proper Officer did not properly consider the detailed reply submitted by the Petitioner. The matter was remitted to the Proper Officer for re-adjudication, directing the Officer to intimate the Petitioner about any required details or documents. The Petitioner was instructed to furnish the necessary explanation and documents, following which the Proper Officer would re-adjudicate the Show Cause Notice, provide a personal hearing, and pass a fresh order within the prescribed period under the Act. The Court clarified that it did not comment on the merits of the parties' contentions, and all rights and contentions were reserved. The challenge to Notification No. 9 of 2023 regarding the initial time extension was left open, and the petition was disposed of accordingly.
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