GST Assessment Under Section 73 Invalidated Due to Lack of Proper Hearing and Insufficient Reasoning in Appellate Order

HC quashed the appellate order challenging GST assessment under Section 73, which imposed penalties without considering submitted evidence. The court found the order non-speaking and violated principles of natural justice. The matter was remanded for fresh consideration, directing the appellate authority to provide a proper hearing and evaluate all documentary evidence before passing a reasoned order.

---

---

Issues involved:
The judgment deals with a challenge to an order passed under Section 73 of the GST Act, 2017, and the subsequent dismissal of an appeal by the appellate authority.

Challenge to Order under Section 73 of GST Act:
The petitioner, a firm registered under the GST Act, was served with a show cause notice alleging unauthorized claim of Input Tax Credit (ITC) based on supplies from a non-existent firm. Despite the petitioner's detailed reply and submission of documents showing transactions through banking channels, an order was passed assessing ITC to be paid along with a penalty of Rs. 26,95,757.40. The petitioner's appeal against this order was dismissed without considering the material submitted, leading to the filing of the writ petition.

Dismissal of Appeal by Appellate Authority:
The appellate order, which upheld the assessment order against the petitioner, was passed without the appearance of the department's representative or the petitioner. The appellate authority failed to consider the documents demonstrating transactions through banking channels, leading to the writ petition challenging the non-speaking order on the grounds of violation of Article 14 of the Constitution of India.

Court's Decision:
The High Court quashed the appellate order dated 04.07.2023 for not considering any material and being a non-speaking order. The matter was remanded back to the appellate authority to pass an order after giving an opportunity of hearing and considering the material on record in accordance with the law. The writ petition was disposed of accordingly.

---