Non-Consideration of Reply filed: Delhi HC directs Proper Officer to Re-Adjudicate SCN [Read Order]

The Delhi High Court directed the Proper Officer to adjudicate the show cause notice (SCN) due to the non-consideration of reply filed by the petitioner.

The Petitioner impugned the order whereby the impugned Show Cause Notice proposing a demand of Rs.11,50,530.00/- against the petitioner had been disposed of and 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 (CGST Act).

The counsel for Petitioner submitted that Petitioner had filed a detailed reply dated 09.01.2024 and an additional reply dated 27.02.2024, however, the impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order.

The Department has raised grounds under separate headings i.e., under declaration of output tax; the tax on outward supplies under declared on reconciliation of data in GSRT-09; excess claim of ITC; scrutiny of ITC reversals; ITC to be reversed on non-business transaction & exempt supplies and ITC claimed from cancelled dealers, return defaulters and tax non payers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving response under each of the heads with supporting documents.

A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “The observation in the impugned order dated 29.04.2024 is not sustainable for the reasons that the reply dated 09.01.2024 and 27.02.2024 filed by the Petitioner are detailed replies with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not properly replied/filed without any justification which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.”

“Further, if the Proper Officer was of the view that any 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” the Court noted.

To Read the full text of the Order CLICK HERE

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