2024 (12) TMI 874 - HC - GST

Assistant Commissioner's order discarding GST show-cause reply without reasons violates natural justice principles under Section 168A

Chetak Logistics Ltd. Versus Union Of India & Ors.

Delhi HC quashed an order by Assistant Commissioner, DGST that discarded petitioner's reply to show-cause notice without reasons. The court held the ... Challenge to impugned order by which the reply to the show-cause has been completely discarded by the proper officer, Assistant Commissioner, DGST without any reasons - it is alleged that the proper declaration of output tax was not made by the Petitioner - non-applicaton of mind - violation of principles of natural justice - HELD THAT:- The impugned order lacks reasons and also lacks any application of mind to the reply given by the Petitioner. Show-cause notices which seek to impose further liabilities upon assesses, including, penalties etc,. have to be decided on merits and not in such a cavalier manner. The impugned order is quashed. The challenge to the validity of the Notification No. 9/2023-CT dated 31st March, 2024 and Notification No. 09/2023-ST dated 22nd June, 2023 and also, Notification No. 56/2023-CT dated 28th December, 2023 and Notification No. 56/2023-ST dated 11th July, 2024 issued by the Resp. Nos. 1 and 2 under Section 168A of the CGST Act is kept open to be raised afresh, if the need so arises. Petition disposed off. Issues:Challenge to impugned order dated 17th August, 2024 by Assistant Commissioner, DGST for discarding reply without reasons. Lack of reasons and application of mind in the impugned order. Identical template orders passed in the past. Quashing of the impugned order and liberty granted to proceed afresh. Challenge to certain notifications kept open for future raising.Analysis:The writ petition challenged the impugned order dated 17th August, 2024, where the Assistant Commissioner, DGST completely discarded the reply to the show-cause notice without providing any reasons. The petitioner had responded to the show-cause notice alleging improper declaration of output tax, but the order lacked any meaningful analysis and merely stated the explanation was not clear. The court noted that similar template orders had been passed in the past by the same official, lacking reasons and application of mind to the replies provided. This lack of proper consideration in such orders was highlighted through references to previous cases where identical issues were raised and resolved.The court emphasized that show-cause notices imposing liabilities like penalties must be decided on merits with due consideration, rather than in a casual manner as seen in the impugned order. Referring to a similar case, the court highlighted the need for a comprehensive and reasoned approach in such matters. The court found the impugned order to be unreasoned and set it aside, allowing the writ petition. The respondents were given the opportunity to proceed afresh based on the show-cause notice and the reply submitted, with all rights and contentions of the parties kept open for further consideration.Additionally, the challenge to specific notifications under the CGST Act was kept open for future raising if necessary. The court directed that the show-cause notice should be reconsidered in light of the petitioner's reply, emphasizing the need for a properly reasoned order to be passed. All rights and remedies were preserved for the parties, and the petition was disposed of accordingly, with pending applications also being resolved. The court's decision to quash the impugned order and provide an opportunity for a fresh hearing underscored the importance of a thorough and reasoned approach in such matters to ensure fairness and justice.