Case Law Details
Larsen And Toubaro Limited And Passavant Energy And Environment GMBH JV Vs Commissioner of Delhi Goods And Service Tax And Another (Delhi High Court)
In the case of Larsen And Toubro Limited And Passavant Energy And Environment GMBH JV Vs Commissioner of Delhi Goods And Service Tax And Another, the Delhi High Court addressed an order dated 28.12.2023, which disposed of a Show Cause Notice dated 23.09.2023, proposing a demand of Rs.55,23,524.00 against the Petitioner under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act).
The petitioner challenged the order, contending that although they had submitted a detailed reply on 18.10.2023, the impugned order did not take their reply into consideration and was cryptic in nature.
Upon examining the matter, the Court observed that the petitioner had provided a detailed reply addressing each head of the Show Cause Notice. However, the impugned order merely stated that the reply was not satisfactory without providing any substantive reasoning or analysis. The Court held that this lack of consideration rendered the order unsustainable.
Furthermore, the Court noted that if the Proper Officer deemed further details necessary, they should have specifically requested them from the petitioner. However, no such opportunity was given, indicating a failure to afford the petitioner due process.
Consequently, the Court set aside the impugned order and remitted the matter back to the Proper Officer for re-adjudication. The Proper Officer was directed to intimate the petitioner of any additional details or documents required, allowing the petitioner to furnish them. Subsequently, the Proper Officer was instructed to re-adjudicate the Show Cause Notice after providing an opportunity for personal hearing and to pass a fresh speaking order in accordance with the law within the prescribed period under Section 75(3) of the CGST Act.
The Court clarified that it did not express any opinion on the merits of the contentions raised by either party and reserved all rights and contentions for further consideration.
Additionally, the Court left open the challenge to Notification No. 9 of 2023 regarding the initial extension of time.
Ultimately, the petition was disposed of in the above terms, providing the petitioner with an opportunity for fair adjudication and due process.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns order dated 28.12.2023, whereby the impugned Show Cause Notice dated 23.09.2023, proposing a demand of Rs.55,23,524.00 against the Petitioner has been disposed of and a demand including penalty has been raised against the Petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act).
2. Learned counsel for Petitioner submits that Petitioner had filed a detailed reply dated 18.10.2023, however, the impugned order dated 28.12.2023 does not take into consideration the reply submitted by the Petitioner and is a cryptic order.
3. Perusal of the Show Cause Notice shows that the Department has given separate headings i.e., excess claim Input Tax Credit [“ITC”]; under declaration of ineligible ITC and ITC claimed from cancelled dealers, return defaulters and tax nonpayers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving full disclosures under each of the heads.
4. The impugned order, however, after recording the narration, records that the reply uploaded by the taxpayer is not satisfactory. It merely states that “Now, since reply/explanation submitted by the taxpayer is not satisfactory. In view of aforesaid circumstances, the undersigned is left with no other option to create demand ex-parte for the tax amount, in accordance with the provisions of CGST / DGST Act & Rules, 2017, as per discrepancies already conveyed through SCN/ DRC-01.” The Proper Officer has opined that the reply is not satisfactory.
5. The observation in the impugned order dated 28.12.2023 is not sustainable for the reasons that the reply filed by the Petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was unsatisfactory. He merely held that the reply is not satisfactory which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
6. Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details.
7. In view of the above, the order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 28.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication.
8. As noticed hereinabove, the impugned order records the reply furnished by the Petitioner is not satisfactory. Proper Officer is directed to intimate to the petitioner any details/documents, as maybe required to be furnished by the petitioner. Pursuant to the intimation being given, petitioner shall furnish the requisite explanation and documents. Thereafter, the Proper Officer shall re-adjudicate the show cause notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act.
9. It is clarified that this Court has neither considered nor commented upon the merits of the contentions of either party. All rights and contentions of parties are reserved.
10. The challenge to Notification No. 9 of 2023 with regard to the initial extension of time is left open.
11. Petition is disposed of in the above terms.
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