GST Proper Officer had to Consider Reply on Merits and then Form an opinion: Delhi HC quashes Demand Order [Read Order]

The Delhi High Court, while quashing the Goods and Services Tax ( GST ) demand order stating that the Proper officers must consider reply on merits and form an opinion.

The Petitioner impugned order, whereby the impugned Show Cause Notice ( SCN ) dated 23.09.2023, proposing a demand of Rs. 5,17,43,004.00 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 counsel for the petitioner Rajesh Mahna, submitted that Petitioner had filed a detailed reply dated 23.10.2023, however, the impugned order dated 28.12.2023 does not take into consideration the reply submitted by the Petitioner and is a cryptic order

Further the observation in the impugned order dated 28.12.2023 is not sustainable for the reasons that the reply dated 23.10.2023 filed by the petitioner is a detailed reply.

The bench stated 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 not satisfactory nor any substantial documents were submitted by the taxpayer which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the Petitioner.

The Proper Officer has opined that the taxpayer did not appear for the personal hearing on the given date and time and no satisfactory reply and substantial documents have been submitted by the taxpayer.

The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that the order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 28.12.2023 was set aside. The case was remanded to the Proper Officer for reassessment due to the finding that the reply provided by the Petitioner was deemed unsatisfactory and lacked sufficient support from relevant documentation.

Additionally, the Proper Officer was instructed to inform the Petitioner of any specific details or documents necessary for submission. Upon receiving this notification, the Petitioner is required to provide the requested explanation and documents.

Subsequently, the Proper Officer will reevaluate the show cause notice, affording the Petitioner an opportunity for a personal hearing, and will issue a new, comprehensive order in accordance with the law within the timeframe stipulated under Section 75(3) of the Central Goods and Services Tax Act. As a result, the Petition was resolved.

To Read the full text of the Order CLICK HERE

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