Delhi HC Quashes GST Order Over Insufficient Rejection Reason; Orders Re-Adjudication

Mudita Express Cargo Private Limited Vs Commissioner, State Goods and Services Tax Delhi & Anr. (Delhi High Court)

In a recent judgment, the Delhi High Court addressed the case of Mudita Express Cargo Private Limited versus the Commissioner, State Goods and Services Tax, Delhi & Another. The court quashed a tax demand of Rs 2.4 crore against the petitioner, citing insufficient reasoning for rejecting their response to the Show Cause Notice (SCN).

The petitioner challenged an order dated 30.12.2023, wherein a tax demand of Rs 2,40,37,812/- was proposed against them under Section 73 of the Central Goods and Services Tax Act, 2017. Despite the petitioner submitting detailed replies with supporting documents, the impugned order did not consider their responses adequately. The court noted that the order was cryptic and lacked proper consideration of the petitioner’s submissions.

The court observed that the Proper Officer deemed the petitioner’s reply as unsatisfactory, incomplete, and lacking adequate documents without proper examination. The order failed to demonstrate that the Proper Officer had applied their mind to the petitioner’s submissions. Moreover, the petitioner was not given an opportunity to clarify their replies or provide further details, if necessary.

Given these shortcomings, the court set aside the impugned order and remitted the show cause notice to the Proper Officer for re-adjudication. The petitioner was granted 30 days to file a further reply, and the Proper Officer was directed to conduct a fresh adjudication with a personal hearing and pass a speaking order within the prescribed period.