Central Goods and Services Tax Act, 2017, Section 73
Determination of tax--Non-consideration
of detailed reply submitted by assessee--Validity of
Conclusion: Where
assessment order was passed against the assessee without considering the
detailed reply submitted by it, the said order was cryptic and was liable to be
set aside.
Revenue passed assessment order under section 73 of the Act
against the assessee. The assessee submitted that the impugned order did not
take into consideration the detailed reply submitted by it and was a cryptic
order. The Proper Officer argued that the reply was not clear and satisfactory.
Held: Proper Officer had to consider the detailed reply submitted
by the assessee on merits and then form an opinion whether the reply was
unsatisfactory, incomplete and not duly supported by adequate documents. He merely
held that the reply was not duly supported by adequate documents, clear and
unsatisfactory, which ex facie showed that the Proper Officer did not
apply his mind to the reply submitted by the assessee. Further, if the Proper
Officer was of the view that any further details were required, the same could
have been specifically sought from the assessee. However, the record did not
reflect that any such opportunity was given to the assessee to clarify its
reply or furnish further documents/details. Hence, the impugned order was
quashed and the matter was remitted to the Proper Officer for re-adjudication.
Decision: In favour
of assessee by way of remand
IN THE DELHI HIGH COURT
SANJEEV SACHDEVA AND HON'BLE MR. JUSTICE RAVINDER DUDEJA
Jullundur Motor Agency Delhi Ltd. v. UOI &
Ors.
W.P. (C) No. 3950/2024 & CM Appl. No.
16231/2024
1 April, 2024
Petitioner by: Pulkit Verma
and Peyush Pruthi, Advocates.
Respondents by: Prasanta
Varma, SCGC with Pankaj Kumar, Pragya Verma and Rakesh Kumar Palo, Advocates
for UOI.
Sanjeev Sachdeva, J.
Petitioner impugns order dated 30-12-2023, whereby the
impugned Show Cause Notice dated 29-9-2023, proposing a demand against the
petitioner has been disposed of and a demand of Rs. 2,23,79,924.00 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 (hereinafter
referred to as the Act).
2. Learned counsel for
Petitioner submits that a detailed reply dated 27-10-2023 was filed to the Show
Cause Notice and pursuant to the reply an authorized representative of the
Petitioner attended the personal hearing and provided further clarification. Further,
in continuation to the reply dated 27-10-2023, another reply dated 28-11-2023
was filed by the Petitioner. However, the impugned order dated 30-12-2023 does
not take into consideration the reply submitted by the petitioner and is a
cryptic order.
3. Perusal of the Show Cause
Notice shows that the Department has given separate headings under declaration
of output tax, excess claim Input Tax Credit [ ITC ], and ITC claimed from
cancelled dealers, returns defaulters and Tax non-payers. To the said Show
Cause Notice, detailed replies were furnished by the petitioner giving full
disclosures under each of the heads.
4. The impugned order,
however, after recording the narration, records that the reply uploaded by the
taxpayer is not duly supported by adequate documents, not clear and not
satisfactory. It merely states that However, during the personal hearing, the
taxpayer reiterated the contents of the reply filed in form DRC-06. On scrutiny
of the same, it has been observed that the same is incomplete, not duly
supported by adequate documents and unable to clarify the issue. Since, the
reply filed is not clear and satisfactory, the demand of tax and interest
conveyed via DRC-01 is confirmed. The Proper Officer has opined that the reply
is not clear and unsatisfactory.
5. Learned counsel for
petitioner submits that a demand has been raised on account of claim of Input
Tax Credit from the cancelled dealer M/s. Rane Brake Lining Limited. He further
submits that the GST registration of M/s Rane Brake Lining Limited has been restored
vide order dated 16-2-2024 in W.P. (C) 2259/2024 : 2024 TaxPub(GST) 472
(Del-HC).
6. The observation in the
impugned order dated 30-12-2023 is not sustainable for the reasons that the
reply filed by the petitioner is a detailed reply. Proper Officer had to at
least consider the reply on merits and then form an opinion whether the reply was
unsatisfactory, incomplete and not duly supported by adequate documents. He
merely held that the reply is not duly supported by adequate documents, clear
and unsatisfactory which ex-facie shows that Proper Officer has not applied his
mind to the reply submitted by the petitioner.
7. Further, if the Proper
Officer was of the view that the reply is not clear and unsatisfactory and if
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.
8. 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
30-12-2023 is set aside. The matter is remitted to the Proper Officer for
re-adjudication.
9. As noticed hereinabove,
the impugned order records that it is incomplete, not duly supported by
adequate documents. 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. Thereafter, the Proper Officer shall re-adjudicate
the show cause notice after giving an opportunity of personal hearing and shall
pass a fresh speaking order in accordance with law within the period prescribed
under section 75(3) of the Act.
10. It is clarified that
this Court has neither considered nor commented upon the merits of the
contentions of either party. All rights and contentions of parties are
reserved.
11. The challenge to Notification
No. 9 of 2023 with regard to the initial extension of time is left open.
12. Petition is disposed of
in the above terms.