The Delhi High Court quashed the GST Demand order issued under Section 73 of the Central Goods and Services Tax ( CGST ) Act, 2017, directing the proper officer to consider the petitioner’s reply and provide them with an opportunity for a personal hearing.
Ethos Limited, a company based in Delhi, challenged a demand order issued by the GST department for Rs. 2,92,00,063/- for the financial year 2018-19. The company argued that they were not given a fair opportunity to respond to the Show Cause Notice ( SCN ), as their detailed reply with supporting documents, submitted on February 20, 2024, was not considered by the department.
The petitioner company, represented by Kavita Jha, argued that the impugned order dated April 24, 2024, was a “cryptic order” that failed to consider their detailed reply. They emphasised that the reply addressed each point raised by the department in show cause notice.
The department claimed that the petitioner’s reply is devoid of merit without any justification or proper reconciliation.
The division bench, comprising Justices Sanjeev Sachdeva and Ravinder Dudeja, observed that the department simply stated the reply lacked merit without providing any specific reasons or justifications. The order upholding the demand without considering the reply was unsustainable.
Further, the court noted that the department could have requested further information from the company if needed instead of dismissing the entire reply. Accordingly, the court quashed the demand order issued by the GST department, and the petitioner was granted 30 days to file any further response to the show cause notice.
After remitting the matter back to the department for re-adjudication, the court also clarified that it did not comment on the merits of the case, and both parties can still present their arguments during the re-adjudication process.
Rajeev Aggarwal, appearing with Prateek Badhwar, Shaguftha. H. Badhwar and Samridhi Vats represented the department.
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