Tax Authority Order Invalidated: Proper Hearing and Detailed Review Mandated Under CGST Act's Principles of Natural Justice

HC found the tax authority's order invalid for not properly considering the petitioner's detailed reply to a Show Cause Notice under CGST Act. The court remitted the matter back to the Proper Officer, directing a fresh review with opportunity for personal hearing and seeking additional details if required, while reserving all substantive rights of parties.

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Issues involved: Impugned order disposing of Show Cause Notice under Section 73 of the Central Goods and Services Tax Act, 2017 without considering detailed reply of the Petitioner.

Summary:
The Petitioner challenged an order dated 26.12.2023 which disposed of a Show Cause Notice proposing a demand of Rs. 20,07,15,517.00 against the Petitioner under Section 73 of the CGST Act. The Petitioner contended that their detailed reply dated 19.10.2023 was not considered in the impugned order and was termed as incomplete. The Show Cause Notice included various headings such as excess claim Input Tax Credit, under declaration of ineligible ITC, and ITC claimed from cancelled dealers. The Petitioner provided a detailed reply under each head. However, the impugned order stated that the reply was incomplete, not supported by adequate documents, and unsatisfactory. The Court held that the Proper Officer did not properly consider the detailed reply submitted by the Petitioner. The Court found that the order was not sustainable as the Proper Officer did not apply his mind to the reply. The matter was remitted to the Proper Officer for re-adjudication, directing the Officer to seek any further details required from the Petitioner and to pass a fresh speaking order after giving an opportunity for a personal hearing.

The Court clarified that it did not comment on the merits of the contentions of either party and reserved all rights and contentions. The challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open. The petition was disposed of accordingly.

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