In a recent case, the High Court ( HC ) of Madras has held that the order passed under section 74 of GST, 2017 without considering the reply of the assessee is not valid.
Engineering Aids, the petitioner Challenged the impugned order dated 05.04.2022 passed under Section 74 of the Goods and Services Tax Act, 2017 by the respondents on the ground of violation of principles of natural justice.
Section 74 of CGST 2017 related to the Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised because of fraud or any willful-misstatement or suppression of facts.
It was contended that even though they have sent a reply dated 25.02.2022 in Form GST DRC-06 to the show cause notice issued by the respondents dated 17.02.2022, in Form GST DRC-01, the same has not been considered in the impugned order dated 05.04.2022 by the respondents.
Further stated that only a summary of the order dated 05.04.2022 passed under Form GST DRC-07 was served on him and not the detailed order and the said detailed order has also not been uploaded in the web portal of the respondents. The petitioner has also filed Form GST DRC-06, dated 25.02.2022, which confirms that the reply dated 25.02.2022 sent by the petitioner was received by the respondents.
There was no reference to the reply dated 25.02.2022 and the said reply has also not been considered in the impugned order. The respondents have served the summary of the order only and not the speaking order.
A single-member bench comprising Justice Abdul Quddhose observed that the respondent failed to consider the reply of the petitioner. The Court quashed the impugned order, dated 05.04.2022 passed by the respondents and the matter is remanded back to the respondents for fresh consideration on merits and by law.
The court directed the respondent to pass final orders, within a period of twelve weeks from the date of receipt of a copy of this order, after adhering to the principles of natural justice and after affording a personal hearing to the petitioner.
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