Tax Officer Must Reconsider Rs. 7.87M GST Demand After Failing to Properly Evaluate Petitioner's Comprehensive Response

The HC found the tax department's order unsustainable due to inadequate consideration of the petitioner's detailed reply regarding a GST demand of Rs. 7.87 million. The court remitted the matter for re-adjudication, directing the petitioner to file a fresh reply within 30 days and instructing the tax officer to conduct a personal hearing and issue a reasoned order within the prescribed statutory period.

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Issues Involved:
The judgment involves the challenge to an order passed under Section 73 of the Central Goods and Services Tax Act, 2017, regarding a demand raised against the Petitioner.

Detailed Summary:
1. The Petitioner challenged an order disposing of a Show Cause Notice proposing a demand of Rs. 7,87,18,296.00 u/s 73 of the CGST Act, 2017. The Petitioner contended that they were not well-versed with GST return filing procedures and had submitted corrected returns along with a detailed reply, which was not considered adequately in the impugned order.

2. Upon perusal, it was found that the Department had raised concerns under separate headings such as excess claim Input Tax Credit (ITC) and Invalid ITC u/s 16(4). The Petitioner had furnished a detailed reply addressing each of these concerns.

3. However, the impugned order dismissed the Petitioner's reply as devoid of merits and justification, without proper consideration. The Proper Officer opined that the reply lacked justification, indicating a failure to apply proper scrutiny.

4. The Court held that the Proper Officer did not adequately consider the detailed reply submitted by the Petitioner and failed to seek further clarification or documents if deemed necessary. As a result, the impugned order was deemed unsustainable and the matter was remitted for re-adjudication.

5. The Court directed the Petitioner to file a reply to the Show Cause Notice within 30 days, following which the Proper Officer was instructed to re-adjudicate the matter, allowing for a personal hearing and issuing a fresh speaking order within the prescribed period under Section 75(3) of the Act.

6. It was clarified that the Court did not delve into the merits of the parties' contentions, and all rights and contentions were preserved. The petition was disposed of accordingly.

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