Supreme Court Quashes GST Order, Mandates Fair Hearing and Reasoned Decision for Taxpayer Under Section 75(3)

SC found the GST department's order unsustainable due to inadequate consideration of the petitioner's detailed reply. The court set aside the impugned order and remitted the matter for re-adjudication, directing the Proper Officer to provide a personal hearing and issue a fresh speaking order within prescribed timelines under Section 75(3) of the CGST Act, 2017.

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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, where a demand including penalty was raised against the Petitioner based on a Show Cause Notice.

Impugned Order Consideration:
The Petitioner challenged an order disposing of a Show Cause Notice proposing a substantial demand against them. The Petitioner contended that their detailed reply was not considered adequately in the impugned order, which was deemed cryptic.

Contentions and Observations:
The Petitioner had submitted a detailed reply to the Show Cause Notice, addressing various issues raised by the Department. However, the impugned order concluded that the reply was unsatisfactory without proper consideration. The Court noted that the Proper Officer failed to evaluate the reply on its merits, indicating a lack of application of mind.

Sustainability of Order:
The Court found the observation in the impugned order unsustainable as the Petitioner's reply was detailed and supported by documents. The Proper Officer's failure to seek further clarification or documents from the Petitioner was also highlighted as a procedural flaw.

Remittance for Re-adjudication:
Consequently, the Court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication. The Petitioner was directed to file a reply to the Show Cause Notice within 30 days for a fresh adjudication process.

Re-adjudication Process:
The Proper Officer was instructed to re-adjudicate the matter after providing the Petitioner with a personal hearing. A fresh speaking order in accordance with the law was mandated within the prescribed period under Section 75(3) of the Act.

Reservation of Rights:
The Court clarified that it did not delve into the merits of the contentions of either party, preserving all rights and contentions for future proceedings. Additionally, the challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open.

Disposition of Petition:
The petition was disposed of in the aforementioned terms, emphasizing the need for a proper re-adjudication process with due consideration given to the Petitioner's submissions.

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