2025 (1) TMI 124 - HC - GST

GST officer's template dismissal of petitioner's response violates natural justice under Section 73 CGST Act

ICICI LOMBARD GENERAL INSURANCE CO. LTD Versus  UNION OF INDIA & ORS.

The Delhi HC allowed a petition challenging a GST order under Section 73 of the CGST Act, 2017, citing non-compliance with personal hearing requirements ... Challenge to final order referable to Section 73 of the Central Goods and Services Tax Act, 2017 CGST Act - non-compliance with personal hearing - violation of principles of natural justice - HELD THAT:- Fact noted is that pursuant to the original Show Cause Notice which had come to be issued, the petitioner had furnished a detailed response. However, the same has been perfunctorily brushed aside and the observations produced. An identical challenge formed the subject matter of XEROX INDIA LIMITED VERSUS ASSISTANT COMMISSIONER, WARD 208 (ZONE -11) DGST AND ANR [2024 (12) TMI 1283 - DELHI HIGH COURT]. Dealing with an identically worded order framed by the said GST Officer, it is obserfed that 'The Assistant Commissioner has clearly adopted a template where the only reason assigned is that the reply filed was “not comprehensible, conceivable, not perspicuous and is ambiguous”. This clearly exhibits an abject non-application of mind and the officer repeatedly employing identical phraseology to deal with such matters.' The impugned order dated 31 August 2024 cannot be sustained - petition allowed. Issues:Challenge to final order under Section 73 of CGST Act - Compliance with personal hearing - Non-application of mind by GST Officer - Quashing of impugned order - Liberty to respondents to proceed afresh - Challenge to notifications under CGST Act/DGST Act.Analysis:The judgment pertains to a writ petition challenging a final order under Section 73 of the Central Goods and Services Tax (CGST) Act issued by the Goods and Services Tax (GST) Officer. The petitioner contested that despite submitting a detailed response to the Show Cause Notice, the GST Officer dismissed it without due consideration, citing it as not comprehensive, conceivable, perspicuous, and ambiguous. The court noted a pattern in the officer's orders, where identical language was used without proper application of mind, as seen in previous cases like Xerox India Limited vs. Assistant Commissioner. This lack of reasoning and non-application of mind led the court to quash the impugned order and allow the writ petition.In line with previous judgments highlighting the need for officers to exercise discretion and avoid template-based decisions, the court emphasized the importance of a reasoned order. The court directed the respondents to review their adjudication process and proceed afresh considering the Show Cause Notice and the response submitted by the petitioner. The court kept all rights and contentions open for both parties on the merits of the case.Furthermore, the judgment kept the challenge open for Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax issued under Section 168A of the CGST Act/Delhi Goods & Services Tax (DGST) Act to be raised again if necessary. This indicates that the issues related to these notifications were not conclusively decided in the current judgment and can be revisited in the future if required. The judgment overall underscores the importance of a fair and reasoned decision-making process by tax authorities and grants the respondents an opportunity to rectify their approach in light of the court's observations.