Didn’t Consider Reply of Assessee: Delhi HC Directs Re-adjudication of Imperfect Order

The Delhi High Court in a ruling asked for the re-adjudication since the same revealed the GST assessment order is flawed. It noted that the proper officer loses to regard the taxpayer’s detailed answer.

The applicant impugned order, in which the impugned SCN, asking for the demand of Rs. 44,24,400.00 against the applicant has been disposed of and a demand including penalty has been asked against the applicant. U/s 73 of the Central Goods and Services Tax Act, 2017 the order has been passed the impugned order, post recording the narration, records that the response uploaded by the assessee is not completed, not supported by adequate documents, unclear, and unsatisfactory.

It said that the assessee filed their response. On scrutiny of the same, it has been marked that it is not acceptable as incomplete, not duly supported by sufficient documents, without proper justification, and therefore unable to clarify the problem. As the response furnished is not clear and satisfactory, the tax and interest demand expressed through the GST DRC-O1 is confirmed.

As per the proper officer, the answer furnished needs to be more, does not have supporting documentation, is unclear, and is unsatisfactory.

The applicant’s representative Mr Rajesh Jain, contended that the applicant had submitted a complete reply on 23.10.2023. The order on 30.12.2023 was unable to regard the same submission, rather than issuing a vague and cryptic decision.

The counsel of the applicant argued that the Proper Officer ignored the prepayment of tax liability u/s 12(2)(b) in conjunction with explanation 2 of the CGST Act. Even after the amount had been settled beforehand, it was incorrectly included in the demand.

The court acknowledged that the assessment of the impugned order was flawed since the same did not consider the detailed nature of the applicant’s response. The failure of the proper officer to delve into the merits of the reply and the superficial dismissal of it since not completed and unsupported by the pertinent documentation shows that lack of due consideration.

The court indicated that if the Proper Officer deemed additional details necessary then they must have been particularly asked from the petitioner. But, no proof is there that the same chance was afforded.

Read Also: Issuance of SCN Under GST Section 73(10) with Time Limits

The division bench, forming Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, regarded the order untenable and asked for its remittance to the Proper Officer for reassessment.

The impugned order was overturned and the case was remitted for the new adjudication.

The proper officer is directed to inform the applicant about any other information or documents needed. On the receipt of this notification then the applicant should furnish the required explanations and documents.

The Proper Officer shall conduct a reevaluation of the Show Cause Notice, affording the applicant a personal hearing, and provide a new, legally sound decision within the specified period under Section 75(3) of the CGST Act.

Therefore as per that the petition was disposed of.