Case Law Details
Future Generali India Insurance Company Limited Vs Goods And Service Tax Officer (GSTO) Ward 203 & Anr (Delhi High Court)
In a significant judgment, the Delhi High Court addressed the handling of taxpayers’ replies in the case of Future Generali India Insurance Company Limited Vs. Goods and Service Tax Officer (GSTO) Ward 203 & Anr. The court ruled that the taxpayer’s detailed responses could not be dismissed without proper justification. This decision highlights the importance of thorough consideration by tax authorities when dealing with taxpayers’ submissions under the Central Goods and Services Tax Act, 2017.
On April 29, 2024, the Delhi High Court scrutinized an order issued by the GSTO Ward 203, which had dismissed the detailed replies submitted by Future Generali India Insurance Company Limited regarding a Show Cause Notice (SCN) dated December 9, 2023. The SCN proposed a demand of ₹11,50,530.00, and the subsequent order included penalties under Section 73 of the CGST Act, 2017.
The petitioner had filed two detailed replies on January 9, 2024, and February 27, 2024, addressing each ground of the SCN with supporting documents. Despite this, the impugned order stated that the taxpayer had not properly replied or filed their explanations, leading to the demand and penalty confirmation.
The Delhi High Court found that the Proper Officer’s order was unsustainable as it failed to consider the detailed replies on their merits. The court noted that if the Proper Officer required further details, it should have been explicitly requested from the petitioner, which was not done in this case. The court emphasized that the Proper Officer had not applied his mind to the replies submitted, rendering the order unjustified.
In its ruling, the court set aside the impugned order and remitted the SCN to the Proper Officer for re-adjudication. The petitioner was granted 30 days to file a further reply, and the Proper Officer was instructed to re-adjudicate the SCN after providing an opportunity for a personal hearing. A fresh speaking order, in accordance with the law, must be passed within the period prescribed under Section 75(3) of the Act.
The Delhi High Court’s judgment in the case of Future Generali India Insurance Company Limited Vs. GSTO Ward 203 & Anr underscores the necessity for tax authorities to thoroughly consider taxpayers’ replies before dismissing them. The ruling mandates that Proper Officers must apply their minds and, if needed, seek further clarifications from taxpayers to ensure a fair adjudication process.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Petitioner impugns order dated 29.04.2024 whereby the impugned Show Cause Notice dated 09.12.2023 proposing a demand of Rs.11,50,530.00/- against the petitioner had been disposed of and 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. Issue notice. Notice is accepted by learned counsel appearing for respondent. With the consent of the parties, petition is taken up for final disposal today.
3. Learned counsel for Petitioner submits that Petitioner had filed a detailed reply dated 09.01.2024 and an additional reply dated 27.02.2024, however, the impugned order dated 29.04.2024 does not take into consideration the reply submitted by the Petitioner and is a cryptic order.
4. Perusal of the Show Cause Notice dated 09.12.2023 shows that the Department has raised grounds under separate headings i.e., under declaration of output tax; the tax on outward supplies under declared on reconciliation of data in GSRT-09; excess claim of ITC; scrutiny of ITC reversals; ITC to be reversed on non-business transaction & exempt supplies and ITC claimed from cancelled dealers, return defaulters and tax non payers. To the said Show Cause Notice, a detailed reply was furnished by the petitioner giving response under each of the heads with supporting documents.
5. The impugned order, however, after recording the narration records that the reply uploaded by the taxpayer is not properly replied/filed. It states that “The taxpayer has submitted his reply on the GSTIN portal. The undersigned examined the reply and the documents submitted by him on the GSTIN portal and found the taxpayer has not properly replied/filed explanation despite of sufficient and repeated opportunities provided to him.**** Now, therefore, the undersigned is left without any option and accordingly, a demand is being created towards Tax /Interest amount already confirmed through SCN/ DRC-01 (Copy attached) in accordance with the provisions of CGST / DGST Act & Rules, 2017.” The Proper Officer has opined that the reply is not properly replied/filed.
6. The observation in the impugned order dated 29.04.2024 is not sustainable for the reasons that the reply dated 09.01.2024 and 27.02.2024 filed by the Petitioner are detailed replies with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not properly replied/filed without any justification which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
7. 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.
8. In view of the above, the impugned order dated 29.04.2024 cannot be sustained and is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication.
9. Petitioner may file a further reply to the Show Cause Notice within a period of 30 days from today. 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.
10. 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.
11. The challenge to Notification No. 56 of 2023 with regard to the extension of time is left open.
12. Petition is disposed of in the above terms.
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