The Delhi High Court directed the re-adjudication of the show cause notice (SCN) as the petitioner was unaware of the proceedings due to the leave of absence of the accountant entrusted with GST compliance on maternity leave.
The Petitioner impugned the order dated 17.04.2024 whereby the impugned Show Cause Notice proposing a demand of Rs. 7,30,212.00/- against the petitioner has been disposed of and a demand including penalty has been created against the petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act).
The counsel for petitioner submits that the accountant of the Petitioner entrusted with GST compliance was on a maternity leave for 12 weeks. As a result, the petitioner was unaware of the proceedings and was unable to furnish a reply to the impugned Show Cause Notice.
Perusal of the Show Cause Notice showed that the Department has raised grounds under separate headings i.e., excess claim of Input Tax Credit [“ITC”]; Excess ITC availed in GSTR-3B compared to the tax on inward supplies declared by the suppliers.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “Keeping in view the peculiar facts of the present case and since the only reason for passing the impugned order is that petitioner had not filed any reply/explanation, one opportunity needs to be granted to the petitioner to respond to the Show Cause Notice. The matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 17.04.2024 is set aside.”
“Petitioner may file a further reply to the Show Cause Notice within four weeks from today. 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 CGST Act” the Court noted.
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