GST Proper Officer Must Pass Reasoned Order u/s 75(6) Even If Assessee Does not Respond to SCN: Allahabad HC [Read Order]

In a recent ruling, the Allahabad High Court ruled the "proper officer" under the Goods and Services Tax ( GST ) must clearly state the relevant facts and the basis for the decision in their final order even if the assessee failed to respond to the show cause notice.

M/s Shakil Ahmad Security Agency filed a writ petitioner before the high court. Here, the petitioner challenged the demand order dated 27.04.2024 issued under Section 73 of the GST Act, 2017.

The petitioner contended that the order was devoid of reasoning and failed to comply with Section 75(6) of the Act, which mandates that a final order must set out the relevant facts and justification for the demand.

Also read: Delhi HC sets aside Order u/s 73 of CGST Act as the Challenge on GST Notification yet to be Adjudicated by Supreme Court [Read Order]

The Court agreed with the petitioner, relying on its earlier decision in M/s Hari Shanker Transport v. Commissioner of Commercial Tax, U.P., where it had held that merely referencing previously issued notices without discussing their content, the assessee's conduct, or factual reasoning does not meet the legal requirement of a self-contained speaking order.

In the present case as well, the impugned order merely referred to the issuance of notices without any independent reasoning or factual findings. The Court observed that even in cases where the assessee fails to respond to show-cause notices, the proper officer is still bound by law to issue a reasoned order under Section 75(6).

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Chief Justice Arun Bhansali and Justice Kshitij Shailendra and quashed the demand order dated 27.04.2024, directing the department to grant the petitioner an opportunity to file a response to the show-cause notice within four weeks. The Court further instructed the GST officer to pass a fresh, reasoned order only after granting the petitioner a proper opportunity of hearing.

To Read the full text of the Order CLICK HERE

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