GST Proper Officer should Consider Reply on Merits and Form Opinion when Reply is not Satisfactory: Delhi HC [Read Order]

A Division Bench of the Delhi High Court held that GST Proper officer should consider reply on merits and form opinion when the reply filed is not satisfactory.

The Petitioner impugned the order, whereby the impugned Show Cause Notice, proposing a demand against the petitioner has been disposed and a demand of Rs.51,64,782.00 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 Petitioner submitted that a detailed reply was filed to the Show Cause Notice, however, the impugned order does not take into consideration the reply submitted by the petitioner and is a cryptic order.

A perusal of the Show Cause Notice shows that the Department has given separate headings excess claim Input Tax Credit [“ITC”], under declaration of ineligible ITC and ITC claim from cancelled dealers, return defaulters and tax non-payers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving full disclosures under each of the heads.

The Bench of Justices Ravinder Dudeja and Sanjeev Sachdeva held that “If the Proper Officer was of the view that reply was not satisfactory and further details were required, the same could have been specifically sought from the petitioner, however, the record does not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details.”

“In view of the above, 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 is set aside. The matter is remitted to the Proper Officer for re-adjudication. As noticed hereinabove, the impugned order records that petitioner has not furnished the requisite details. Proper Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner. Pursuant to the intimation being given, petitioner shall furnish the requisite explanation and documents” the Bench added.

To Read the full text of the Order CLICK HERE

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