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

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 incorrect tax liability declaration in GSTR-09 returns. The court found the impugned order suffered from complete non-application of mind, failed to consider petitioner's contentions in response to show cause notice, and lacked reasoning. Following precedents in similar cases involving identical defective orders by the same officer, the HC held the order untenable due to violation of natural justice principles and remanded the matter for fresh consideration of the show cause notice and petitioner's reply.

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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.

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