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

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 and violation of natural justice principles. The petitioner had submitted a detailed response to the original Show Cause Notice, but this was perfunctorily dismissed by the GST officer. The court noted that the Assistant Commissioner had adopted a template approach, using identical phraseology across cases, stating that replies were "not comprehensible, conceivable, not perspicuous and ambiguous." This demonstrated abject non-application of mind by the officer. The court referenced a similar case involving another petitioner where identical wording was used by the same GST officer, highlighting the systematic nature of this procedural flaw. The impugned order dated 31 August 2024 was set aside for failing to meet basic standards of reasoned decision-making and natural justice.

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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.

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