Failure to consider a taxpayer's reply can vitiate adjudication and justify quashing with remand for fresh hearing.

An adjudication order based on facts not borne out by the taxpayer's reply, and passed without properly considering that reply, is liable to interference. The Madras HC found that the impugned order proceeded on an assertion that input tax credit had been reversed in the GSTR-9 return, although the show cause reply did not say so, showing non-consideration of the reply. The order was quashed and the matter remanded for fresh adjudication, with opportunity to file a detailed reply, produce supporting documents, and be heard personally, subject to deposit of 10% of the disputed tax demand.

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Issues: Whether the order in original was liable to be quashed for failure to consider the petitioner's reply and whether the matter required remand for fresh adjudication after affording opportunity.

Analysis: The impugned order proceeded on a factual basis that the petitioner had reversed the input tax credit in the GSTR-9 return, whereas the reply filed to the show cause notice did not contain such an assertion. This discrepancy showed that the reply was not duly considered. The order therefore warranted interference. In view of the petitioner's agreement to deposit 10% of the disputed tax demand, the matter was fit to be remitted for fresh consideration after permitting a detailed reply and affording a personal hearing.

Conclusion: The impugned order was quashed and the matter was remanded for fresh adjudication, subject to deposit of 10% of the disputed tax demand and filing of a detailed reply with supporting documents.

Final Conclusion: The assessment order could not be sustained because the petitioner's reply was not properly dealt with, and the dispute was sent back for reconsideration after compliance with the stipulated deposit and procedural safeguards.

Ratio Decidendi: An adjudication order founded on facts not borne out by the reply and passed without proper consideration of the reply is liable to be quashed and remanded for fresh decision after giving a reasonable opportunity of hearing.

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