Kerala HC Directs Adjudicating Authority to Respond to Taxpayer’s Reply U/S 74 of GST Act

The petitioner in the case of Maya Pradeep Kumar vs. Audit Officer approached the Kerala High Court challenging a show cause notice (Ext.P4) issued under Section 74 of the CGST/SGST Acts.

The applicant claimed that they answered all audit queries in the process of the audit, the final audit report (Ext.P3) overlooked these submissions directing to the issuance of the Show Cause Notice.

The petitioner, no valid basis is there to start proceedings u/s 74. However, the Government Pleader claimed that the case was still at the show cause phase, and the petitioner could raise all objections along with the claims regarding the audit report’s precision before the Adjudicating Authority. It was stressed that the Adjudicating Authority is competent to decide whether the proceedings u/s 74 are explained.

The HC agreed with the Government pleader, citing that the concerns of the applicant for the audit findings and the applicability of section 74 could be addressed in the process of adjudication. It was noted by the court that it does not provide a reason to presume that the adjudicating authority shall overlook the objections of the applicant.

Therefore, the writ petition was disposed of with the directions to the applicant to raise all contentions to the adjudicating authority, which should regard them before issuing a final decision. The applicant should be granted a personal hearing, and the due date to answer the Show Cause Notice was extended by 2 weeks from the date of the ruling.

It was directed to the adjudicating authority to conclude the case within 3 months from receipt of the certified ruling copy. It was mentioned by the court that it did not incur any findings on the merits of the applicant’s claim.