Not Giving Acceptable Reasons for Denying SCN Reply: Delhi HC Rejects GST Order U/S 73(9)

An order passed via the adjudicating authority has been set aside by the Delhi High court u/s 73(9) of the Central Goods and Services Tax (CGST) Act, 2017 and the Delhi Goods and Services Tax Act (DGST), 2017 for not furnishing the adequate reasons for rejecting the applicants response to a Show Cause Notice (SCN).

The applicant, M/S Avantha Holdings Limited, contested an order on 29.04.2024 issued via the Adjudicating Authority following an SCN on 30.01.2024. The SCN asked for additional payment for ‘unbilled revenue.’ The petitioner answered, claiming that it had already paid the required taxes and interest for the ‘unbilled revenue’ and furnished a detailed documentation to support this claim.

It was remarked by the bench of Justice Vibhu Bakhru and Justice Sachin Datta that the order of the adjudicating authority does not furnish any substantial cause for rejecting the explanation of the applicant.

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The order only cited that the applicant’s response was obtained but was considered “not acceptable, being incomplete/not duly supported by adequate documents without proper justification and thus unable to clarify the issue.”

It was noted by the bench that the adjudicating authority does not regard the response of the applicant and is unable to provide any reasoned explanation for its rejection. The court set aside the impugned order and remanded the case back to the Adjudicating authority for fresh consideration.

It was asked by the court that the adjudicating authority is required to pass a speaking order post providing the applicant a chance to be heard. Also, the authority might ask for any additional documents or materials required for the adjudicating of the Show Cause Notice.

Arjun Raghavendra M, Dr Gokul Kishore, A R Hema, and Piyush Deshpande represented the applicant. Udit Malik, ASC, and Vishant Chanda represented the respondents.

Case Title	M/S Avantha Holdings Limited V/S The Proper Officer GST
Case No.	W.P.(C) 10110/2024
Date	24.07.2024
Counsel For Petitioner	Mr. Arjun Raghavendra M, Dr. Gokul Kishore, Mr. A R Hema and Mr. Piyush Deshpande, Advocates.
Counsel For Respondent	Mr. Udit Malik, ASC and Mr. Vishant Chanda, Advocate.
Delhi High Court	Read Order