Tag: Reply not Considered

Detailed Reply submitted is not considered – Matter remanded back for re-adjudication

Citation:

Sethia Enterprises Vs. Commissioner, Delhi Goods and Service Tax

Delhi High Court – W.P. (C) No. 7730 of 2024

[2024] 163 taxmann.com 381 (Delhi)

Facts:

  1. Show Cause Notice was issued u/s. 73 dated 12th December 2023 for demand of Rs. 12,42,094 proposing penalty and Order was issued dated 24th April 2024.
  2. Demand is raised under the headings:
    • Net tax under declared due to non-reconciliation of turnovers in other returns and E-way bill information,
    • reconciliation of GSTR-1 with GSTR-3B;
    • excess claim of Input Tax Credit (ITC);
    • excess ITC claimed on account of non-reconciliation and
    • Excess ITC availed in GSTR-3B compared to GSTR-2A/2B.
  3. Petitioner states that he has submitted a detailed reply dated 12th January 2024 along with relevant documents under each of the given heads, but the same is not taken into consideration in the Order and the Order is cryptic.
  4. Order States that reply is not satisfactory as the taxpayer has not attached sufficient documents in support of the reply. Extracts from the Order:
    • And whereas, it is noticed that the Taxpayer filed reply/explanation within stipulated period and did not appear for Personal Hearing before Proper Officer on the given date and time.
    • Further, another opportunity to submit reply and for the sake of natural justice opportunity for Personal Hearing, as per provisions of Section 75(4) DGST Act, was also provided to the taxpayer by issuing reminder through the GST portal.
    • Now, since no satisfactory explanation has been received from the taxpayer despite sufficient and repeated opportunities, which indicate that the taxpayer has nothing to say in the matter.
    • The taxpayer has not attached sufficient documents in support of his reply i.e. invoices, proof of payment etc. Hence, in view of aforesaid circumstances, the undersigned is left with no other option to create demand ex-parte.
  5. Findings of the Hon’ble Delhi High Court:
    • The observation in the impugned order dated 24.04.2024 is not sustainable for the reasons that the reply dated 12.01.2024 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not satisfactory and taxpayer has not attached sufficient documents in support of his reply which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
    • Further, if the Proper Officer was of the view that 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.
  6. Held by Hon’ble Delhi High Court that:
    • Impugned Order dated 24th April 2024 is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication.
    • Petitioner can file a further reply within 30 days. After granting personal Hearing, the PO shall pass a speaking order within the period prescribed u/s. 75(3)
    • The Court has not commented upon the Merits.

Section 75(3) of CGST Act: Where any order is required to be issued in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.

Section 75(4) of CGST Act: An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.

Order passed holding SCN reply as “Not Satisfactory” is Set Aside

In the case of:

Decolene Fibers (P.) Ltd. Vs. Commissioner, Directorate General of GST

High Court of Delhi

W.P. (C) No. 5429 of 2024

Facts of the Case:

An Order dated 30.12.2023 has been passed under Section 73 of CGST Act, against a detailed reply dated 17.10.2023 to the Show Cause Notice (SCN) dated 24.09.2023

SCN contains separate headings viz, Excess Claim of ITC, scrutiny of ITC availed on Reverse charge, ITC to be reversed on non-business transactions & exempt supplies and under declaration of Ineligible ITC, to which the petitioner has submitted detailed reply giving disclosures under each head

However, the order simply states that “And whereas, in response to the DRC-01, the Taxpayer submitted his reply in DRC-06 and the reply of the registered person, as well as data available on GST Portal has been checked / examined and the reply / submission of the taxpayer is not found to be satisfactory“.

Findings of the Court:

  1. The observation in the impugned order dated 30.12.2023 is not sustainable for the reasons that the reply dated 17.10.2023 filed by the Petitioner is a detailed reply with supporting documents. 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.
  2. Further, if the Proper Officer was of the view that 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.

Held that:

  1. The Impugned order dated 30.12.2023 cannot be sustained and is set aside and the matter is liable to be remitted back to the proper officer for Re-Adjudication.
  2. This court has neither considered nor commented upon the merits of the contentions of either party.

GSTR-3B Vs. 1 Vs. 2A Notice – Order passed without considering the reply – Tables of SCN were contradictory — Order Set Aside

In the case of:

Ambika Stores Vs. Deputy State Tax Officer

W.P. No. 6320 of 2024

[2024] 160taxmann.com433 (Madras)

It was observed by Hon’ble High Court of Madras that:

  1. On examining the show cause notice, it is evident that two tables are set out therein. In the first table, the CGST and SGST amounts in GSTR-3B are shown as Rs. 3,33,787/-, whereas in the second table dealing with the difference between the GSTR-3B return and the auto populated GSTR-2A return, the GSTR-3B amounts are specified as Rs. 5,19,362/- both for CGST and SGST. The sum of Rs. 5,19,362/- tallies with the ITC availed of by the petitioner.
  2. Thus, the show cause notice is contradictory.
  3. In addition, it appears that the reply of the petitioner was not considered in the assessment order.
  4. The order simply states “It has been noticed that you have filed both GSTR 1 and GSTR-3B for the period from July – 2017 to March – 2018 thereby collecting the tax. During the scrutiny of the return for the above tax period difference between liability declared in GSTR-1 and tax paid under GSTR-3B as detailed below which shows that there was a mismatch between GSTR 1 and GSTR 3B returns.”
  5. The above order indicates clearly that the assessing officer did not take into account the reply dated 29.09.2023 and record reasons as to why such reply is not satisfactory.
  6. Therefore, the impugned assessment order is quashed and department can issue a fresh SCN.

Adjudication Order passed without providing written notice of Personal Hearing and ignoring the reply of the assessee is set aside

Citation:

Cart2India Online Retail (P.) Ltd. Vs. Union of India

Writ Petition (L) No. 25179 of 2023

[2023] 157 taxmann.com 212 (Bombay)

Facts of the Case:

  1. Petitioner has submitted a reply in DRC-06 dated 17th June 2023 to the Show Cause Notice, where Option for Personal Hearing has been selected as “Yes”.
  2. They have received a phone call on 5th July 2023 requiring them to attend personal hearing on 7th July 2023. No written Notice was issued regarding the hearing. Though the petitioner has stated on call that he would appear, he could not appear on the said date.
  3. Without providing a final opportunity for personal hearing, order been issued in DRC-07 demanding Tax, along with Interest u/s. 50 and Penalty u/s. 73(9) of CGST Act and Section 20 of IGST Act by the State Tax Officer (STO).
  4. Petitioner stated that the order passed is against the principles of Natural Justice and therefore the same needs to be set aside and passed after providing an opportunity of Personal Hearing.
  5. Hon’ble High Court of Bombay has observed that:
    • Petitioner has sufficiently requested for grant of personal hearing.
    • Merely because they have not attended the hearing without valid reason, it should not be presumed that they are not interested in hearing.
    • No written notice was issued regarding the hearing and the Order also did not consider the submissions of the petitioner as given in their reply to the Show Cause Notice.
  6. It was held that:
    • The Impugned Order dated 26th July 2023 is quashed and Set Aside and remanded back to STO, to be decided after providing an opportunity of personal hearing.
    • Petitioner is directed to appear before STO on 8th December 2023 to undertake to appear for Personal Hearing on a fixed date.
    • If the petitioner does not appear for hearing after undertaking to do so, STO is free to proceed further and pass an appropriate Order.