Case Law Details
RPJ Polymers Vs Union Of India & Ors (Delhi High Court)
RPJ Polymers, the petitioner, challenged an order dated 28.12.2023 issued under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act), by which a Show Cause Notice (SCN) dated 24.09.2023 proposing a demand of Rs. 1,38,12,142.00 against RPJ Polymers was disposed of and a demand including penalty was raised. The petitioner argued that they had submitted a detailed reply on 24.10.2023, but the impugned order did not take into consideration their reply and was cryptic in nature.
The Show Cause Notice outlined two main issues: excess claim of Input Tax Credit (ITC) and ITC claimed from cancelled dealers, return defaulters, and tax nonpayers. RPJ Polymers provided a detailed reply to each of these issues, including disclosures. However, the impugned order, while acknowledging the reply, stated that it lacked complete relevant documents. The Proper Officer opined that RPJ Polymers failed to provide relevant documents and establish the actual movement of goods regarding ITC claimed from cancelled dealers. The order concluded that RPJ Polymers was not entitled to the benefit and must pay the demand along with interest and penalty.
The petitioner argued that their reply was detailed and supported by documents, and the Proper Officer failed to consider it on merits. Moreover, they contended that if additional details were needed, they should have been specifically requested, which was not done. Consequently, they challenged the sustainability of the order, asserting that it should be remitted to the Proper Officer for re-adjudication.
The court agreed with the petitioner, finding that the Proper Officer did not adequately consider the reply submitted by RPJ Polymers. The order lacked sustainability as it merely stated that the reply lacked complete relevant documents without properly assessing its content. The court noted the absence of any opportunity given to RPJ Polymers to clarify or furnish further documents. Therefore, the impugned order was set aside, and the matter was remitted to the Proper Officer for re-adjudication.
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