The Delhi High Court set aside the cancellation of GST retrospectively in the absence of a reply to an opportunity to hear under section 75(4) of the Central Goods and Services Tax Act, 2017 (CGST Act) granted through the GST portal.
M/S. Vishal Chem, the petitioner challenged the order whereby the impugned Show Cause Notice proposing a demand of Rs. 34,51,018.00 against the Petitioner, has been disposed of and a 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 Act).
Counsel for Petitioner submitted that Petitioner had filed a detailed reply dated 11.10.2023 and uploaded the same on 24.10.2023, however, the impugned order dated 26.12.2023 does not take into consideration the reply submitted by the Petitioner and is a cryptic order.
Further submitted that Chartered Accountant had visited the office of proper officer and tendered documents, however, the proper officer declined to accept the documents and accordingly she prays that an opportunity be granted to the petitioner to file further reply along with supporting documents.
The order recorded that the reply uploaded by the taxpayer is unsatisfactory. It states that “And whereas, it is noticed that the Taxpayer has filed his reply with regard to above mentioned DRC 01 and the same has not been found satisfactory **** And whereas, a further opportunity to submit his reply for the sake of principal of natural justice and opportunity for Personal Hearing, under Section 75(4) DGST Act, was granted to the taxpayer by issuing “ADJOURNMENT” through the GST portal. It was mentioned that the Proper Officer has opined that the reply is unsatisfactory.
It was observed that the proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is unsatisfactory, which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
It was evident that the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details.
A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja remitted matter to the Proper Officer for re-adjudication.
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