The Delhi high Court directed the Proper Officer to pass orders under Section 75(3) of the Central Goods and Services Tax Act, 2017 (CGST Act) as no opportunity was granted to the petitioner to clarify the reply filed by them.
The petitioner impugned the order whereby the impugned Show Cause Notice proposing a demand of Rs 3,50,60,125.00/- against the petitioner has been disposed of and demand including penalty has been raised against the petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017.
The Counsel for the petitioner submitted that that the petitioner had filed a detailed reply dated 11.01.2024, however, the impugned order dated 21.03.2024 does not take into consideration the reply submitted by the Petitioner and is a cryptic order. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving response under each of the heads with supporting documents.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “The observation in the impugned order dated 21.03.2023 is not sustainable for the reasons that the reply dated 11.01.2024 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is devoid of merits without any justification 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. In view of the above, the impugned order dated 21.03.2024 cannot be sustained and is set aside” the Court noted.
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