The Delhi High Court set aside the Goods and Service Tax ( GST ) order denying the Input Tax credit ( ITC ) Claim since the Proper Officer failed to consider the reply of the assessee. The Proper Officer had to at least consider the reply on merits and then form an opinion.
Surinder Kumar Garg, the Petitioner challenged the order whereby the impugned Show Cause Notice proposing a demand of Rs.2,60,20,062.00 against the Petitioner has been disposed of and a 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 ( the Act ).
The Department has given separate headings i.e., excess claim of Input Tax Credit [ “ITC” ]; under declaration of ineligible ITC 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 disclosures under each of the heads.
The order recorded that the reply uploaded by the taxpayer is insufficient and unsatisfactory. It states that “And whereas, it is noticed that the Taxpayer has submitted his/her reply and the same is not found satisfactory. And whereas, after going through the contents of the SCN explained therein, it has been evident that the taxpayer has not replied properly.” The Proper Officer has opined that the reply is insufficient and unsatisfactory.
The Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is unsatisfactory, which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja remitted the matter to the Proper Officer for re-adjudication. The Court set aside the impugned order and the matter is remitted to the Proper Officer for re-adjudication.
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