The Delhi High Court recently remanded a Show-Cause Notice (SCN) pertaining to Goods and Services Tax (GST), observing that the Respondent Sales Tax Officer had passed the impugned order without proper reasoning, non-application of mind, and abstained from considering the reply filed by the taxpayer.
In the Writ Petition, Holy Land Marketing Private Limited challenged the impugned order dated 31st August, 2024 passed by the Sales Tax Officer, Class-II, Ward 202,203 and 205, Zone-11, Delhi, while also seeking the quashal of Notification No. 56/2023-Central Tax dated 28th December, 2023 and Notification No. 56/2023-State Tax dated 11th September, 2024 citing them to be ultra vires of Section 168-A of the Central Goods and Services Tax Act, 2017 (CGST Act).
The preceding Show-Cause Notice alleged discrepancy in the declared turnover of the company, alleging under-declaration of the output tax liability, while calling upon the Petitioner to pay out Rs. 46,49,420/- as outstanding tax.
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Although the Petitioner had sent in a detailed response to the SCN on 14th June, 2024, they were still served with reminder notices by the Department subsequent to which the impugned order was passed on 31st August, 2024.
While Advocates Abhishek Garg, Yash Gaiha and Naman Mehta represented the Petitioner, the High Court directed Bharat Gupta to accept notice on behalf of Respondents 1 and 2.
The Division Bench of Justice Prathiba M. Singh and Justice Amit Sharma observed that none of the contentions raised by the Petitioner in their response to the SCN had been adverted to in the impugned order, with the Order being mute on the grounds and reasoning for rejecting the contentions of the Petitioner.
The concerned Officer, Subhash Kumar Jha drew the ire of the Division Bench who observed that a Coordinate Bench of the High Court had set aside an order by the same Officer on similar grounds in the case of Chetak Logistic Ltd. vs. Union of India & Ors., W.P.(C) 17637/2024, noting identical language and complete non-application of mind.
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Remarking lack of reasoning, non-consideration of the reply and non-application of mind in passing the impugned order dated 31st August, 2024, the Delhi High Court remanded the Show-Cause Notice for fresh consideration in light of the replies filed by the Petitioner, while directing that the matter be assigned to a different Proper Officer who shall be required to meritoriously adjudicate the SCN within a period of two months after providing the Petitioner an opportunity of hearing.
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