Applicability of GST circular vitiated adjudication and led to remand for fresh reconsideration

A GST adjudication under Section 73 was found vulnerable because the applicable departmental circular governing discrepancies in ITC claims had not been considered. The court record indicated that the circular was relevant to the tax period in question, and the taxpayer had not been given a proper opportunity to present its case afresh. On that basis, the impugned adjudication order, summary and letter were set aside, and the matter was remitted for reconsideration in accordance with law, with liberty to file additional pleadings and documents.

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Issues: Whether the impugned adjudication order and consequential summary and letter were liable to be set aside for non-consideration of the applicable GST circular, and whether the matter required remand for fresh consideration.

Analysis: The dispute arose from an adjudication under Section 73 of the Central Goods and Services Tax Act, 2017 for the 2017-18 tax period. The record showed that the relevant circular prescribing the procedure for dealing with discrepancies in ITC claims was applicable to the facts and had not been considered by the adjudicating authority. In view of the applicability of the circular and the need to give the petitioner an opportunity to place its case afresh, the impugned decision could not be sustained.

Conclusion: The impugned orders and letter were set aside and the matter was remitted to the first respondent for reconsideration afresh in accordance with law, with liberty to the petitioner to file additional pleadings and documents.

Final Conclusion: The petitioner succeeded in obtaining quashing of the impugned GST action, but the substantive liability was left open for reconsideration on remand.

Ratio Decidendi: Where a binding departmental circular applicable to the relevant tax period governs the adjudicatory procedure, failure to consider it vitiates the adjudication and warrants remand for fresh decision.

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