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www.taxpublishers.in Central Goods and Services Tax Act, 2017, Section 73 Determination of tax--*Order passed without considering reply submitted by assessee--Validity of* *Conclusion:* Where revenue passed assessment order against the assessee without considering reply submitted by it, the said order was cryptic. Revenue issued show cause notice and passed order under section 73 of the Act. The assessee submitted that a detailed reply was filed to the show cause notice, however, the impugned order did not take into consideration the reply submitted by it and was a cryptic order. *Held:* The observation in the impugned order was not sustainable for the reason that the reply filed by the assessee was a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was not satisfactory. He merely held that the reply was not satisfactory, 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 reply was not satisfactory and 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. Accordingly, the impugned order was set aside 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 & RAVINDER DUDEJA Balaji Medical & Diagnostic Research Centre v. UOI & Ors. W.P.(C) No. 3340/2024 & CM Appls. 13754-55/2024 5 March, 2024 Petitioner by: Harsh Makhija, Advocate. Respondents by: Rajeev Aggarwal, ASC for R-1 and 4. Jitesh Vikram Srivastava, SPC and Prajesh Vikram Srivastava, Advocate. Aditya Singla, SSC for CBIC with Anand Pandey, Advocate. JUDGMENT *Sanjeev Sachdeva, J.* Petitioner impugns order dated 27-12-2023, whereby the impugned Show Cause Notice dated 23-9-2023, proposing a demand against the petitioner has been disposed and a demand of Rs. 3,09,18,988.00 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 23-10-2023 was filed to the Show Cause Notice, however, the impugned order dated 27-12-2023 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 ], under declaration of ineligible ITC and ITC claim from cancelled dealers, return defaulters and tax nonpayers. To the said Show Cause Notice, a detailed reply dated 23-10-2023 was 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 satisfactory. It merely states that And whereas, in response to the DRC-01, the Taxpayer submitted his reply in Form DRC-06. The reply of the registered person as well as data available on GST Portal have been checked/examined and the submission of the Taxpayer was not found satisfactory. The Proper Officer has opined that the reply is unsatisfactory. 5. The observation in the impugned order dated 27-12-2023 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 not satisfactory. He merely held that the reply is not satisfactory which ex- facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. 6. Further, if the Proper Officer was of the view that reply was not satisfactory and 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. 7. 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 27-12-2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication. 8. As noticed hereinabove, the impugned order records that petitioner has not furnished the requisite details. 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. 9. 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. 10. The challenge to Notification No. 9 of 2023 with regard to the initial extension of time is left open. 11. Petition is disposed of in the above terms.

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Central Goods and Services Tax Act, 2017, Section 73

Determination of tax--Order passed without considering reply submitted by assessee--Validity of

Conclusion: Where revenue passed assessment order against the assessee without considering reply submitted by it, the said order was cryptic.

Revenue issued show cause notice and passed order under section 73 of the Act. The assessee submitted that a detailed reply was filed to the show cause notice, however, the impugned order did not take into consideration the reply submitted by it and was a cryptic order. Held: The observation in the impugned order was not sustainable for the reason that the reply filed by the assessee was a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was not satisfactory. He merely held that the reply was not satisfactory, 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 reply was not satisfactory and 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. Accordingly, the impugned order was set aside 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 & RAVINDER DUDEJA

Balaji Medical & Diagnostic Research Centre v. UOI & Ors.

W.P.(C) No. 3340/2024 & CM Appls. 13754-55/2024

5 March, 2024

Petitioner by: Harsh Makhija, Advocate.

Respondents by: Rajeev Aggarwal, ASC for R-1 and 4. Jitesh Vikram Srivastava, SPC and Prajesh Vikram Srivastava, Advocate. Aditya Singla, SSC for CBIC with Anand Pandey, Advocate.

JUDGMENT

Sanjeev Sachdeva, J.

Petitioner impugns order dated 27-12-2023, whereby the impugned Show Cause Notice dated 23-9-2023, proposing a demand against the petitioner has been disposed and a demand of Rs. 3,09,18,988.00 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 23-10-2023 was filed to the Show Cause Notice, however, the impugned order dated 27-12-2023 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 ], under declaration of ineligible ITC and ITC claim from cancelled dealers, return defaulters and tax nonpayers. To the said Show Cause Notice, a detailed reply dated 23-10-2023 was 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 satisfactory. It merely states that And whereas, in response to the DRC-01, the Taxpayer submitted his reply in Form DRC-06. The reply of the registered person as well as data available on GST Portal have been checked/examined and the submission of the Taxpayer was not found satisfactory. The Proper Officer has opined that the reply is unsatisfactory.

5. The observation in the impugned order dated 27-12-2023 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 not satisfactory. He merely held that the reply is not satisfactory which ex- facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.

6. Further, if the Proper Officer was of the view that reply was not satisfactory and 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.

7. 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 27-12-2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication.

8. As noticed hereinabove, the impugned order records that petitioner has not furnished the requisite details. 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.

9. 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.

10. The challenge to Notification No. 9 of 2023 with regard to the initial extension of time is left open.

11. Petition is disposed of in the above terms.