Tax Demand Order Invalidated: Procedural Flaws Expose Insufficient Justification and Mandate Comprehensive Reconsideration of Evidence

HC found tax demand order under CGST and DGST Acts procedurally defective. Order was set aside due to inadequate consideration of petitioner's contentions, inconsistent officer issuance, and lack of substantive justification. Matter remanded for fresh review, allowing petitioner to submit additional reconciliation documents within three weeks. No merit-based determination was made, preserving all parties' rights.

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Issues: Impugned order under CGST Act and DGST Act raising tax demand. Challenge on grounds of non-consideration of contentions, incorrect officer issuing order, and lack of justification in the order.

In this case, the petitioner challenged an order dated 24.04.2024 under the CGST Act and DGST Act, raising a tax demand of &8377;88,89,593. The petitioner contended that the impugned order was passed without considering any of the contentions raised in response to the Show Cause Notice dated 10.12.2023. Additionally, the petitioner argued that the order was not issued by the officer who issued the SCN. The SCN alleged incorrect tax filling on inward supplies, prompting the petitioner to explain the underdeclared tax amount. The petitioner responded to the SCN, denying the alleged Input Tax Credit claims and providing detailed ledger accounts and invoices to support its position.

The impugned order, however, failed to address the petitioner's contentions adequately. It merely dismissed the petitioner's reply as lacking merit without proper justification or reconciliation. The order did not reference the ledger accounts provided by the petitioner or explain why the claims were deemed unmerited. Furthermore, the order incorrectly stated that a personal hearing was granted to the petitioner following the unsatisfactory reply, which was not the case as the hearing date was mentioned in the SCN before the petitioner's response.

Considering the deficiencies in the impugned order, the court set it aside and remanded the matter to the concerned officer for a fresh review. The petitioner was allowed to submit a reconciliation statement and relevant documents within three weeks for the officer's reconsideration. The court clarified that its decision to set aside the order did not imply a judgment on the merits of the petitioner's challenge. All rights and contentions of the parties were preserved, and the petition was disposed of accordingly.

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