2024 (12) TMI 1287 - HC - GST

Sales Tax Officer's order under Section 168-A quashed for non-application of mind and natural justice violations

Holy Land Marketing Private Limited Versus Sales Tax Officer Class Ii/Avato Ward 205 Zone 11, Delhi & Ors.

The Delhi HC set aside an order passed by the Sales Tax Officer under Section 168-A of the Central GST Act, 2017 and Delhi GST Act, 2017 regarding ... Challenge to impugned order passed by Sales Tax Officer - seeking quashing of N/N. 56/2023-Central Tax dated 28th December, 2023 and N/N. 56/2023-State Tax dated 11th September, 2024 on the grounds of it being ultra vires of Section 168-A of the Central Goods and Services Tax Act, 2017 read with Delhi Goods Services Tax Act, 2017 - failure to declare correct tax liability in the annual returns of GSTR-09 - non-consideration of contentions raised by the Petitioner - non-application of mind - violation of principles of natural justice. HELD THAT:- It is seen that none of the contentions raised by the Petitioner in response to the Show Cause Notice have even been adverted to in the impugned order. The order is completely silent on the grounds and the reasons for which the reply of the Petitioner has not been considered or has been rejected. Recently, in the case of Indian Highways Management Company Limited v. Assistant Commissioner Delhi Department of Trade And Taxes And Anr., Order [2024 (12) TMI 131 - DELHI HIGH COURT] a Coordinate Bench of this Court has already taken note of similar orders and has set aside the same. This Court in Chetak Logistic Ltd. vs. Union of India & Ors. [2024 (12) TMI 874 - DELHI HIGH COURT] had occasion to consider another previous order of the same officer, which had identical language and complete non-application of mind wherein this Court had observed 'These petitions were allowed by the coordinate Bench of this Court and a perusal of the said orders would show that the wording is almost identical. In fact, 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.' In view of the lack of reasoning, non-consideration of the reply and non-application of mind in passing the impugned order dated 31st August, 2024, it is held that the impugned order is not tenable and deserves to be set aside - matter is remanded for fresh consideration of the Show Cause notice and the replies given by the Petitioner. Petition disposed off by way of remand. Issues:Challenge to impugned order dated 31st August, 2024 passed by Sales Tax Officer; Quashing of Notification No. 56/2023-Central Tax and Notification No. 56/2023-State Tax; Lack of reasoning and non-consideration of reply in the impugned order.Analysis:The judgment pertains to a challenge against an impugned order dated 31st August, 2024 issued by the Sales Tax Officer, which arose from a Show Cause Notice dated 15th May, 2024. The petitioner contested the under-declaration of output tax and the resulting tax liability. The Court found the impugned order to be cryptic and templated, lacking proper consideration of the petitioner's responses. The Court highlighted the use of identical language by the Proper Officer in previous cases, indicating a lack of application of mind. Reference was made to similar instances where such orders were set aside by the Court due to insufficient reasoning and non-application of mind.The Court emphasized that show-cause notices demanding additional liabilities must be decided on merits and not in a cavalier manner. The judgment cited previous cases where orders with identical language were quashed due to lack of reasoning and non-consideration of responses. The Court noted that the petitioner had provided a detailed response to the original Show Cause Notice, which was disregarded in the impugned order. Consequently, the Court quashed the impugned order and allowed the writ petition, giving the respondents the liberty to proceed afresh based on the Show Cause Notice and the reply submitted.Furthermore, the challenge to certain notifications issued under the CGST Act was kept open for future consideration. The Court directed that the show-cause notice be heard afresh, emphasizing the need for a proper reasoned order. The matter was remanded to a different Proper Officer for adjudication within two months, with the petitioner granted an opportunity for a hearing. The judgment concluded by disposing of the petition and instructing communication of the order to the concerned Department for compliance.