Tax Demand Order Overturned: Officer Fails to Properly Evaluate Evidence, Case Remitted for Fair Reconsideration with Fresh Response

HC set aside a tax demand order under CGST Act after finding the Proper Officer did not adequately consider the Petitioner's detailed replies. The court remitted the matter for re-adjudication, directing the Petitioner to file a fresh response within 30 days and instructing the tax authority to conduct a fair review with proper personal hearing, without commenting on the case merits.

---

---

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

Summary:
The Petitioner challenged an order dated 30.12.2023, which disposed of a Show Cause Notice proposing a demand of Rs. 77,80,646.00 against the Petitioner u/s 73 of the CGST Act. The Petitioner contended that detailed replies were submitted but not considered in the order.

The Show Cause Notice outlined reasons for the demand, including discrepancies in ITC availed, short payment of tax, and wrongful availing of input tax credit. The Petitioner provided detailed replies with disclosures under each head. However, the impugned order stated that no proper reply or explanation was received, despite the submissions made by the Petitioner.

The Court found that the Proper Officer did not adequately consider the detailed replies and failed to apply his mind to the submissions. It was noted that the Proper Officer did not seek further details from the Petitioner before concluding that no proper reply was received. Consequently, the impugned order was set aside, and the matter was remitted to the Proper Officer for re-adjudication.

The Court directed the Petitioner to file a further reply to the Show Cause Notice within 30 days. The Proper Officer was instructed to re-adjudicate the matter, provide an opportunity for a personal hearing, and pass a fresh speaking order within the prescribed period under Section 75(3) of the Act. The Court clarified that it did not comment on the merits of the case and reserved all rights and contentions of the parties. Additionally, the challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open. The petition was disposed of accordingly.

---