Aarem Trad Ex Private Limited Vs Sales Tax Officer & Anr
Date: February 22, 2024
Subject Matter
Order invalid due to failure to consider taxpayer's reply
Summary
The petitioner challenged the order dated December 22, 2023, which concluded the proceedings under Section 73 of the Central Goods and Services Tax Act, 2017, resulting in a demand against the petitioner. The petitioner claimed that they mistakenly claimed Integrated GST (IGST) credit instead of Central GST (CGST) and State GST (SGST) credit due to a clerical error. They asserted that the amount is still credited to their account and that they had informed the authorities of this error in response to a Show Cause Notice. - The order in question did not adequately address the petitioner's detailed reply, dismissing it as insufficient without proper consideration. The order noted that since payment was not made within 30 days of the notice, a demand was created based on available documents. The court found that the proper officer failed to consider the merits of the petitioner's explanation, leading to the conclusion that the order lacked reasoning and was therefore unsustainable. - Consequently, the court set aside the impugned order and remitted the matter to the proper officer for re-evaluation of the Show Cause Notice, instructing that the petitioner be granted an opportunity for a personal hearing and allowing the petitioner to file an additional reply within one week. The court also kept the challenge to certain notifications open and allowed the petition as stated.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns order dated 22.12.2023 whereby the proceedings under Section 73 of the Central Good and Service Tax Act 2017 have been concluded and a demand has been created against the petitioner.
2. Learned counsel for petitioner submitted that the petitioner had, on account of an error, claimed Integrated GST credit instead of CGST and SGST credit which was a mere bonafide clerical error.
3. He submitted that the amount is still lying to the credit of the petitioner and that the petitioner had duly informed the authorities of the same in response to the Show Cause Notice.
4. He further submitted that the impugned order does not record any finding on the said reply or even advert to the reply filed by the petitioner. It merely states that the reply was not found comprehensive.
5. It is noticed that the order dated 22.12.2023 records that “Since, no payment has been made within 30 days of the issue of the notice by you; therefore, on the basis of documents available with the department and information furnished by you, if any, demand is created for the reasons and other details attached in annexure”.
6. Further, the observation in the impugned order dated 22.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply.
7. The proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that “ since no payments has been made within 30 days of the issue of notice by you and no proper reply/explanation has been received” which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner.
8. Accordingly the Impugned order being bereft of any reasoning is not sustainable and is set aside.
9. The matter is accordingly remitted to the proper officer to re-adjudicating the Show Cause Notice after giving an opportunity of personal hearing to the petitioner.
10. At request of learned senior counsel for the petitioner, we permit the petitioner to file additional reply to the Show Cause Notice within a period of one week from today.
11. The challenge to the subject notifications raised by the petitioner is left open.
12. The petition is allowed in the above terms.