Failure to consider the assessee's reply under GST scrutiny vitiates later section 73 proceedings as without jurisdiction

Section 61 of the Odisha GST Act requires the proper officer to consider the assessee's explanation before moving to further action, and section 61(3) applies only where no satisfactory explanation is furnished. As the reply dated 29 July 2021 was on record but not shown to have been considered, initiation of proceedings under section 73 was held to be without jurisdiction. The impugned order was set aside and quashed, and the assessee's reply was directed to be dealt with under section 61 before any further action is taken.

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Issues: Whether initiation of proceedings under section 73 of the Odisha Goods and Services Tax Act, 2017 was valid when the assessee's reply furnished in the earlier section 61 proceeding was not considered.

Analysis: Section 61(2) requires consideration of the explanation furnished, and section 61(3) permits further action only when no satisfactory explanation is furnished. The reply dated 29 July 2021 was on record, but it was not shown that the reply was considered before the section 73 action was initiated. The failure to consider the reply while moving to the next stage vitiated the proceeding.

Conclusion: The initiation of proceedings under section 73 was without jurisdiction and the impugned order was set aside and quashed. The assessee's reply is to be dealt with under section 61 before any further action is taken.

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