2024 (6) TMI 603 - HC - GST

Tax Orders Invalidated: Lack of Reasoning Leads to Mandatory Reconsideration of Show Cause Notice with Fresh Hearing

Manoj Diwakar Versus Union Of India And Anr.

HC set aside tax orders dated 26.12.2023 due to lack of reasoning and non-application of mind. Directed re-adjudication of Show Cause Notice, granting ... Violation of principles of natural justice - lack of reasoning in orders - non-application of mind - fraud by tax consultant - HELD THAT:- Perusal of the impugned orders issued by Assistant Commissioner and the GST officer show that the same do not contain any reasoning. The case of the petitioner that fraud was committed by the tax consultant is not even adverted to in the said orders. Further, the orders do not have any CRN number, nor is the name of any assessee mentioned. The order passed by the Assistant Commissioner, Mr. Vinod Kumar states that no reply has been received and as such it is assumed that taxpayer has nothing to state. The order passed by the GST officer, records that reply/explanation submitted by the taxpayer within time was examined and found not satisfactory. Clearly, there appears to be complete non-application of mind to the case of the petitioner. Accordingly, the said orders dated 26.12.2023 cannot be sustained and are set aside with an order of remit. Accordingly, the proper officer shall once again re-adjudicate the Show Cause Notice dated 23.09.2023 read with Scrutiny Notice dated 13.07.2020 as also the replies filed by the petitioner. Petition disposed off. Issues involved: Impugning of orders dated 26.12.2023 disposing of Show Cause Notice for the tax period July 2017-March 2018, alleging fraud by tax consultant, lack of reasoning in orders, non-application of mind, and granting petitioner two weeks to file a supplementary reply.Impugned Orders Disposed of Without Reasoning:The petitioner challenged orders dated 26.12.2023 disposing of the Show Cause Notice issued by Assistant Commissioner Mr. Vinod Kumar and GST Officer Mr. Amit Kumar for the tax period July 2017-March 2018. The petitioner contended that the orders lacked reasoning and did not address the fraud allegedly committed by the tax consultant. Furthermore, the orders did not contain a CRN number or mention the name of the assessee. Assistant Commissioner's order assumed no reply was received, while the GST Officer's order stated the reply was found unsatisfactory. The High Court found a complete non-application of mind to the petitioner's case and set aside the orders, directing a re-adjudication of the Show Cause Notice and replies.Remit for Re-Adjudication:Due to the lack of reasoning and non-application of mind in the impugned orders, the High Court held that the orders dated 26.12.2023 could not be sustained and were set aside with an order of remit. The proper officer was directed to re-adjudicate the Show Cause Notice dated 23.09.2023 along with the Scrutiny Notice dated 13.07.2020, as well as the replies filed by the petitioner. The Court emphasized the need for a fresh adjudication considering the peculiar facts and circumstances of the case.Granting Time for Supplementary Reply:In light of the circumstances, the petitioner was granted a further two weeks to file a supplementary reply to the Show Cause Notice and the Scrutiny Notice. Following the submission of the supplementary reply, the proper officer was instructed to pass a fresh speaking order after providing an opportunity for a personal hearing to the petitioner. The High Court clarified that it did not comment on the merits of the parties' contentions, and all rights and contentions were reserved.Conclusion:The petition was disposed of with the above terms, emphasizing the need for a proper re-adjudication considering the lack of reasoning and non-application of mind in the impugned orders. The Court granted the petitioner additional time to submit a supplementary reply and directed a fresh adjudication process with a personal hearing opportunity.