2024 (12) TMI 1284 - HC - GST

HC Quashes Adjudication Order for Lack of Reasoning, Orders Reconsideration; Future Challenge to Notifications Left Open.

ARCHIT KHANDELWAL PROPRIETOR ARCHIT ENTERPRISES Versus THE UNION OF INDIA REVENUE SECRETARY, MINISTRY OF FINANCE & ORS.

The HC quashed the adjudication order dated 28 August 2024, deeming it unsustainable due to its failure to address the petitioner's reply or provide ... Challenge to impugned adjudication order - adjudication order and SCN barred by time limitation or not - seeking declaration that N/N. 9/2023-Central Tax dated 31.3.2023 as well as N/N. 56/2023-Central Tax dated 28.12.2023 through which the time period has been extended up till 30.8.2024 for the purpose of sec 73(10) for the year 2019-20 not only rub against sec 168A of the CGST Act but are also contrary and in conflict with the mandate of sec 168A of the CGST Act - HELD THAT:- The proceedings under Section 73 have come to be finalized with the response of the writ petitioner being perfunctorily rejected by merely observing that it has not been found to be satisfactory. Since the final order as framed fails to engage with the reply which was submitted by the writ petitioner or disclose any reasons in support of the ultimate conclusions which have come to be rendered, the same cannot be sustained. The impugned order dated 28 August 2024 is hereby quashed - petition allowed. Issues:Challenge to adjudication order dated 28.8.2024 and limitation period, validity of notifications under Section 168A of CGST Act, final order under Section 73, rejection of petitioner's reply, demand creation ex-parte, quashing of impugned order, leaving open the challenge to notifications for future proceedings.Analysis:The writ petition sought to quash the adjudication order dated 28.8.2024 and declare it as time-barred, challenging the validity of notifications extending time periods. The petitioner argued that the notifications conflicted with Section 168A of the CGST Act. The petition also requested the issuance of writs of Mandamus and Certiorari, along with any other appropriate orders. However, the petitioner's counsel limited the challenge to the final order framed by the respondents, leaving open the challenge to the notifications for future consideration.The proceedings under the CGST Act were initiated against the petitioner with a Show Cause Notice dated 14 May 2024, to which the petitioner responded on 28 June 2024. The final order under Section 73 was based on the response provided by the petitioner, which was deemed unsatisfactory by the Tax Officer. Despite repeated opportunities for the petitioner to provide additional explanations, no further response was received. Consequently, an ex-parte demand was created, imposing penalties and interest as per the Act's provisions.The High Court noted that the final order failed to engage with the petitioner's reply or provide reasons for the conclusions reached. As a result, the Court found the final order unsustainable and allowed the writ petition, quashing the impugned order dated 28 August 2024. The Court directed the respondents to proceed afresh, considering the petitioner's submitted reply.The Court also kept open the challenge to Notification No.9/2023 - Central Tax dated 31 March 2023 and Notification No. 56/2023 - Central Tax dated 28 December 2023 for future proceedings if necessary. This decision ensures that the issues regarding the validity of the notifications can be addressed at an appropriate time.