Case Law Details
Syndicate Bank Vs Department of Trade And Taxes (Delhi High Court)
Delhi High Court ruled on the writ petition filed by Syndicate Bank, challenging the order dated August 20, 2024, issued by the GST Officer under Section 73 of the Central Goods and Services Tax Act, 2017. The case pertained to tax demands based on alleged under-declaration of output tax and ineligible Input Tax Credit (ITC). The GST Officer determined that the bank had failed to reconcile discrepancies in GSTR-1 and GSTR-9 filings, leading to a tax demand of ₹1,14,91,237 in CGST and SGST each. Additionally, a demand of ₹5,34,477 in CGST and SGST was raised due to insufficient justification for claimed ITC. However, the court found that the final order did not address or consider the bank’s response to the Show Cause Notice (SCN), rendering the decision unreasoned.
Acknowledging the lack of a reasoned conclusion, the Delhi High Court set aside the impugned order, emphasizing the necessity of a fair hearing and proper justification in tax assessments. Instead of keeping the matter pending, the court remanded the case for reconsideration by the GST Officer. The ruling ensures that the SCN proceedings are re-examined in accordance with legal principles, providing the petitioner another opportunity to present its case. This judgment reinforces the importance of procedural fairness in GST adjudications.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The writ petitioner has approached this Court aggrieved by the order dated 20 August 2024 passed by the Goods and Services Tax [“GST”] Officer concluding proceedings referable to Section 73 of Central Goods and Services Tax Act, 2017.
2. On going through the final order passed, we find that insofar as issue Nos. 1 and 3 are concerned, the GST Officer has observed as follows:-
“• Under declaration of output tax: Reconciliation of GSTR-01 with GSTR-09: The taxpayer in its reply has not addressed/replied the issue under the demand. Hence, the demand of Rs. 11491237 in CGST and SGST each along with interest and penalty is created.
xxxx xxxx xxxx
- Under declaration of Ineligible ITC: The taxpayer has given a vague reply without proper reasoning and documents viz invoices etc. therefore demands of Rs. 534477 in the CGST and SGST alongwith interest and penalty is created.”
3. As is manifest from the above extracts, the authority has failed to assign or accord any reasoning or even allude to the response which had been submitted pursuant to the Show Cause Notice [“SCN”] which was issued. In view of the above, we are of the opinion that the said order, being unreasoned, would not sustain.
4. Faced with our aforenoted tentative conclusion, Mr. Malik, learned counsel for the respondent submitted that rather than the matter being kept pending on the board of this Court, the ends of justice may merit the matter being remanded for consideration of the GST Officer afresh.
5. Accordingly, we allow the instant writ petition and quash the impugned order dated 20 August 2024. It shall be open for the GST Officer to examine and conclude the SCN proceedings afresh and in accordance with law.