2024 (7) TMI 809 - HC - GST

Tax Order Struck Down: Unreasoned Assessment Invalidated, Petitioner Granted Opportunity to Present Full Defense Under Proper Procedural Scrutiny

HC found merit in petitioner's challenge against tax order. The court set aside the unreasoned order demanding Rs. 2.74 crore, noting lack of proper ... Time Limitation - Challenge to assessment order and N/N. 9/2023-Central Tax dated 31.03.2023 - time limit specified under Section 73 (10) of Central Goods and Services Act, 2017 for passing an order under Section 73 (9) of the CGST Act, 2017 - HELD THAT:- A plain reading of the impugned order indicates that it does not set out any reasons for rejecting the petitioner’s response to the Show Cause Notice. It is also apparent that the petitioner was not afforded a personal hearing pursuant to the Reminder Notice dated 23.09.2023 and the impugned order incorrectly proceeds on the basis that such personal hearing was afforded to the petitioner. It is not necessary to examine the petitioner’s contentions that the impugned order was passed beyond the period of limitation. The matter remanded to the respondent no. 2 for consideration afresh - impugned order set aside. Issues:Impugning order dated 26.12.2023 and Notification No. 9/2023-Central Tax dated 31.03.2023, Barred by limitation, Excess Input Tax Credit availed, Lack of personal hearing, Unreasoned impugned order.Analysis:The petitioner challenged an order dated 26.12.2023 and Notification No. 9/2023-Central Tax dated 31.03.2023, extending the time limit for passing orders under the Central Goods and Services Act, 2017. The petitioner contended that the Show Cause Notice dated 23.09.2023 and a reminder notice dated 08.12.2023 were time-barred. The petitioner, a sole proprietor, traded in goods like 'Iron' and 'Pulses' during the tax period from July 2017 to March 2018. The petitioner filed returns and reconciliation statements but was issued a Show Cause Notice alleging excess Input Tax Credit availed. The petitioner responded, stating some goods were tax-free. However, a reminder notice lacking a date for a personal hearing was issued. Subsequently, an order was passed on 26.12.2023 demanding Rs. 2,73,78,128.40, without providing reasons for rejecting the petitioner's response or conducting a proper personal hearing.The High Court found merit in the petitioner's argument that the impugned order was unreasoned and set it aside. The court noted that the order lacked reasons for rejecting the response and incorrectly assumed a personal hearing was conducted. As a result, the court did not delve into the limitation issue raised by the petitioner. The matter was remanded for fresh consideration by the respondent. The court clarified that parties retained their rights and contentions, allowing the petitioner to raise defenses as advised. Additionally, the order did not prevent the petitioner from challenging the impugned notification at a later stage. All pending applications were disposed of accordingly.