Tax Authority's Order Invalidated, Directing Comprehensive Reassessment with Proper Hearing and Detailed Consideration of Taxpayer's Evidence

HC set aside tax demand order against taxpayer under CGST Act. The court found the tax authority's order unsustainable as the petitioner's detailed reply was not adequately considered. Order was remitted back to the Proper Officer for re-adjudication, directing a fresh assessment with opportunity for personal hearing and submission of additional documents within specified timelines.

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Issues involved: Impugning an order u/s 73 of the Central Goods and Services Tax Act, 2017 for raising a demand against the petitioner.

Summary:
The petitioner challenged an order dated 29.12.2023, which disposed of a show cause notice proposing a demand of Rs. 32,07,115.80 against the petitioner under Section 73 of the CGST Act, 2017. The petitioner contended that their detailed reply to the show cause notice was not considered in the impugned order, which merely stated the reply was unsatisfactory and devoid of merits. The Department had alleged under declaration of output tax, excess claim of Input Tax Credit (ITC), under declaration of ineligible ITC, and ITC claim from cancelled dealers, return defaulters, and tax non-payers. The petitioner provided a detailed reply on 13.12.2023 addressing each allegation. However, the impugned order upheld the demand without proper consideration of the petitioner's reply, stating it lacked merits and justification. The Court found the order unsustainable as the reply was detailed and opined that the Proper Officer did not adequately assess the reply on its merits. The Court also noted that the petitioner was not given an opportunity to clarify or provide further details despite the officer deeming the reply incomplete. Consequently, the Court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication. The Proper Officer was directed to request any necessary details/documents from the petitioner, who must furnish them within a week, followed by re-adjudication within two weeks after a personal hearing opportunity. The Court clarified that it did not evaluate the merits of the parties' contentions, and all rights and contentions were reserved. The petition was disposed of accordingly.

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