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2025 (3) TMI 1301 - HC - GSTCategorisation of impugned order u/s 73 or 74 of the KGST/CGST Act 2017 - HELD THAT - A perusal of the material on record will indicate that though the proceedings is styled as one under Section 74 of the Act in reality/substance the proceedings are actually under Section 73 of the Act especially having regard to the contents of the impugned order which does not contain necessary material particular/details so as to satisfy the ingredients of Section 74 of the Act but are under Section 73 of the Act. It is also relevant to state that the impugned order is an exparte order which deserves to be set aside by providing one more opportunity to the petitioner to put forth their claim and seek benefit of GST Amnesty Scheme by treating the proceedings one under Section 73 of the Act. Under these circumstances it is deemed just and appropriate to set aside the impugned order and remit the matter back to respondent No.1 for reconsideration afresh in accordance with law. Petition allowed by way of remand.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Classification of the Impugned Order under Section 73 or Section 74 of the KGST/CGST Act, 2017 The legal framework involves Sections 73 and 74 of the KGST/CGST Act, 2017, which pertain to the determination of tax not paid or short paid. Section 73 deals with cases where there is no fraud, willful misstatement, or suppression of facts, whereas Section 74 deals with cases involving such elements. The Court's interpretation and reasoning concluded that the impugned order, although styled under Section 74, lacked the necessary material particulars to satisfy the requirements of Section 74. Instead, the contents indicated that the proceedings should be under Section 73, which does not involve fraud or suppression. The key evidence and findings were based on the contents of the impugned order, which did not align with the criteria for Section 74. The application of law to facts led the Court to determine that the proceedings should be treated under Section 73, allowing the petitioner to seek the benefits of the GST Amnesty Scheme. The Court treated competing arguments by acknowledging the petitioner's claim and the respondent's opposition, ultimately siding with the petitioner based on the evidence. 2. Opportunity to Present the Case The Court noted that the impugned order was passed ex parte, meaning without the petitioner's input. This was deemed a denial of a reasonable opportunity to present their case, warranting a reconsideration of the order. The legal reasoning emphasized the necessity of providing a fair chance for the petitioner to present their claims, especially in light of the potential applicability of the GST Amnesty Scheme. 3. Entitlement to GST Amnesty Scheme Benefits Under Section 128A of the KGST/CGST Act, 2017, the GST Amnesty Scheme allows for certain benefits. The Court found that once the proceedings are correctly categorized under Section 73, the petitioner would be eligible to apply for these benefits. The Court's conclusion was that the petitioner should be given the opportunity to seek these benefits following the reconsideration of the order. SIGNIFICANT HOLDINGS The Court held that the impugned order should be set aside and the matter remitted back for reconsideration under Section 73 of the KGST/CGST Act, 2017. The Court stated: "The proceedings are actually under Section 73 of the Act especially having regard to the contents of the impugned order which does not contain necessary material particular/details so as to satisfy the ingredients of Section 74 of the Act but are under Section 73 of the Act." The core principle established is that orders must be correctly categorized according to the applicable sections of the law, ensuring parties have the opportunity to avail themselves of relevant schemes and benefits. The final determinations on each issue were as follows:
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