Case Law Details
Paras Enterprises through Proprietor Sulabh Gupta Vs Union of India (Delhi High Court)
In a landmark judgment, the Delhi High Court has set aside a Goods and Services Tax (GST) order against Paras Enterprises, underscoring the importance of providing taxpayers with a fair opportunity to defend themselves against show cause notices. The case, titled Paras Enterprises through Proprietor Sulabh Gupta Vs Union of India, highlights critical procedural lapses in the GST adjudication process, particularly the failure to adequately consider the taxpayer’s response.
The heart of the dispute lies in a show cause notice dated 28th September 2023, which proposed a demand of Rs. 10,11,855.60, including penalties, under Section 73 of the Central Goods and Services Tax Act, 2017. Despite the petitioner’s detailed reply to the notice, the adjudicating authority’s order on 23rd December 2023 dismissed the explanations as unsatisfactory without providing a proper assessment of the reply or granting a hearing for defense.
The Delhi High Court’s scrutiny revealed that the adjudication order was cryptic and failed to engage with the taxpayer’s detailed disclosures. The Court noted the absence of any attempt by the Proper Officer to seek further clarification or documents from the petitioner, which would have been the procedural norm if the reply was deemed insufficient.
Crucially, the Court found that the petitioner was not given an adequate opportunity to defend the show cause notice through a hearing, a fundamental right in any adjudicatory process. This lack of opportunity led to the Court’s decision to set aside both the impugned order and the show cause notice, remitting the matter back to the Proper Officer for re-adjudication with clear instructions to allow the taxpayer a fair chance to present their case.
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