2024 (3) TMI 113 - HC - GST

Legal Challenge Overturned: Insufficient Reasoning Invalidates Tax Authority's Order Under CGST Section 73

HC set aside an order under Section 73 of CGST Act 2017 due to lack of reasoning in the original decision. The court remitted the matter back to the ... Validity of Conclusion of proceedings u/s 73 of the Central Good and Service Tax Act 2017 without considering the reply filed by the petitioner - creation of demand against the petitioner - petitioner had, on account of an error, claimed Integrated GST credit instead of CGST and SGST credit which was a mere bona fide clerical error - HELD THAT:- The proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that “since no payments has been made within 30 days of the issue of notice by you and no proper reply/explanation has been received” which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner. The Impugned order being bereft of any reasoning is not sustainable and is set aside - the matter is accordingly remitted to the proper officer to re-adjudicating the Show Cause Notice after giving an opportunity of personal hearing to the petitioner - petition allowed. Issues involved:The judgment involves the challenge against an order concluding proceedings under Section 73 of the Central Goods and Service Tax Act 2017, where a demand was created against the petitioner based on a claimed Integrated GST credit instead of CGST and SGST credit, due to a clerical error.Impugned Order and Lack of Reasoning:The petitioner challenged the order dated 22.12.2023, arguing that the impugned order did not consider the detailed reply provided by the petitioner in response to the Show Cause Notice. The order simply stated that the reply was not comprehensive without delving into the merits of the explanation provided.Sufficiency of Reply and Proper Officer's Duty:The petitioner contended that the reply submitted was detailed and should have been considered on its merits by the proper officer. It was highlighted that the officer's decision was based on the lack of payment within 30 days and the perceived inadequacy of the reply, indicating a failure to properly assess the petitioner's response.Setting Aside the Impugned Order:The Court found the impugned order lacking in reasoning and unsustainable, leading to its set aside. The matter was remitted to the proper officer for re-adjudication of the Show Cause Notice, with a directive to provide the petitioner with an opportunity for a personal hearing.Permission for Additional Reply and Open Challenge:In response to the senior counsel's request, the petitioner was permitted to file an additional reply to the Show Cause Notice within one week. Additionally, the challenge to the subject notifications raised by the petitioner was left open for future consideration.Conclusion:The petition was allowed in the above terms, emphasizing the importance of proper consideration of responses by the authorities and the need for reasoned decisions in such matters.