GST Show Cause Notice Invalidated: Proper Officer Ordered to Reconsider Petitioner's Detailed Reply with Fair Hearing

The SC found that the Proper Officer failed to adequately consider the petitioner's detailed reply to a GST Show Cause Notice. The court set aside the original order, directing re-adjudication with a proper hearing, and withdrew punitive actions. The petitioner was granted 30 days to submit a fresh reply, with the Proper Officer instructed to pass a reasoned order within the prescribed statutory period.

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Issues involved:
The judgment deals with the impugning of an order under Section 73 of the Central Goods and Services Tax Act, 2017, where a demand was raised against the petitioner.

Detailed Summary:

Issue 1: Consideration of petitioner's reply
The petitioner challenged an order disposing of a Show Cause Notice proposing a demand against them. The petitioner argued that their detailed reply was not considered in the impugned order, which was deemed cryptic. The Court noted that the petitioner had responded to the Show Cause Notice with supporting documents under separate headings, but the impugned order claimed no satisfactory reply or substantial documents were submitted by the petitioner. The Court found that the Proper Officer did not adequately consider the detailed reply submitted by the petitioner, leading to the order being unsustainable.

Issue 2: Lack of opportunity for clarification
The Court observed that if the Proper Officer required further details, they should have specifically requested them from the petitioner. However, no such opportunity was given to the petitioner to clarify their reply or provide additional documents. This lack of opportunity for clarification was considered a flaw in the proceedings.

Decision:
The Court set aside the impugned order dated 29.12.2023 and remitted the Show Cause Notice to the Proper Officer for re-adjudication. All punitive actions taken against the petitioner were directed to be withdrawn, including blocking of credit ledger and provisional attachment of property. The petitioner was granted 30 days to file a further reply to the Show Cause Notice. The Proper Officer was instructed to re-adjudicate the matter, provide a personal hearing, and pass a fresh speaking order within the prescribed period under the Act. The Court clarified that it did not comment on the merits of the contentions, reserving all rights and contentions of the parties. The petition was disposed of accordingly.

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