The Delhi High Court has invalidated an assessment order issued by the Commissioner of Delhi Goods and Service Tax ( GST ), emphasising the failure to duly consider the detailed response and evidence submitted by the petitioner. The court has ordered re-adjudication of the matter, providing an opportunity for the petitioner to file an additional reply and attend a personal hearing.
The case was brought before the High Court by SPS Enterprises, challenging the assessment order dated 29th December 2023, issued under Section 73 of the Central Goods and Services Tax ( CGST ) Act, 2017. The order proposed a demand of Rs.5,46,288 against the petitioner.
The petitioner, represented by Mr. Rajesh Mahna, Mr. Ramesh Johri, Mr. Ramanand Roy, Mr. Mayank Kouts and Mr. Shiva Narang contended that they had submitted a comprehensive reply dated 23rd December 2023, addressing each allegation raised in the Show Cause Notice ( SCN ) issued on 28th September 2023. However, the assessment order failed to take into account the submitted response and supporting documents, rendering it arbitrary and unjust.
The bench concurred with the petitioner’s argument. The court noted that the assessment order merely stated that no satisfactory reply or substantial documents were submitted by the taxpayer, without providing any reasoned analysis of the petitioner’s response.
Further, the court observed that the tax authority did not afford the petitioner an opportunity to clarify or supplement their response with additional documents or details if required. This lack of procedural fairness undermined the principles of natural justice and due process, warranting the invalidation of the assessment order.
The division bench comprising Mr. Justice Sanjeev Sachdeva and Mr. Justice Ravinder Dudeja directed the Proper Officer to re-adjudicate the SCN, emphasising the importance of affording the petitioner a fair opportunity to present their case. The court ordered the withdrawal of all punitive actions taken against the petitioner, including the blocking of credit ledger and provisional attachment of property, if any, pursuant to the impugned order.
The bench further instructed that the petitioner be allowed to file a further reply to the SCN within 30 days from the date of the judgment. Subsequently, the Proper Officer is mandated to re-adjudicate the matter after providing an opportunity for a personal hearing and to pass a fresh speaking order within the prescribed period under Section 75(3) of the CGST Act.
In result, the High Court set aside the impugned order and remitted the case back to the tax authority for re-adjudication upholding the principles of natural justice and procedural regularity.
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