Delhi HC Sets Aside cryptic GST order which was passed without giving any details

Tek Xplore Through Its Proprietor Ms. Renuka Maini Vs Union of India & Ors (Delhi High Court)

In a significant development, the Delhi High Court has intervened on behalf of Tek Xplore, represented by its proprietor Ms. Renuka Maini, against a GST demand notice issued by the Union of India & Others. The court’s decision underscores the importance of procedural fairness and the right to a detailed explanation before any demand is enforced under the Goods and Services Tax Act, 2017.

The case revolves around an order that upheld a Show Cause Notice against Tek Xplore, creating a demand under Sections 16(2)(c) and 17(5) of the GST Act. The petitioner contended that the demand was unjustified and also highlighted the issuance of a duplicate demand under both provisions. A significant point raised was the inability to respond to the Show Cause Notice due to the bereavement of the proprietor’s husband, which the court took into consideration.

Upon examination, the Delhi High Court found the order to be cryptic, lacking in detail, and essentially a template without any specific reasoning. It emphasized the necessity for a more thorough examination and the provision of a detailed speaking order by the proper officer.

The court’s decision to set aside the impugned order and allow Tek Xplore an opportunity to file a reply to the Show Cause Notice represents a crucial acknowledgment of the need for transparency and fairness in the adjudication process. The directive for a fresh adjudication, complete with a personal hearing, within a specific timeframe, illustrates the judiciary’s role in ensuring that administrative actions are not only just but also adequately reasoned and documented. This ruling sets a precedent for future cases, highlighting the essential principles of natural justice and the importance of giving stakeholders an opportunity to present their case fully.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. Petitioner impugns order dated 12.2023, whereby Show Cause Notice dated 24.09.2023, has been set aside and demand created against the petitioner.

2. Learned counsel for petitioner submits that petitioner could not file a reply to the Show Cause Notice on account of bereavement of the husband of the proprietor. He submits that the Show Cause Notice raises a demand under Section 16 (2)(c) and 17 (5) of the Goods and Services Tax Act, 2017. He submits that demand could not have been raised against the petitioner and further that a duplicate demand has been raised under both the provisions. He further submits that that the impugned order is cryptic order merely using a template and does not give any reason. He prays that an opportunity be granted to the petitioner to file a reply to the Show Cause Notice and the Show Cause Notice be adjudicated afresh.

3. Issue notice. Notice is accepted by learned counsel appearing for respondents. With the consent of parties, the appeal is taken up for final disposal.

4. Perusal of the order shows that the order is a cryptic order without giving any details. After narrating the recitals, it merely records ‘in view of above, there is no option but to proceed with the demands mentioned in the Show Cause Notice’.

5. The impugned order is accordingly set aside. Petitioner is given an opportunity to file a reply to the Show Cause Notice within one week from today. On such a reply being filed, the proper officer shall adjudicate the Show Cause Notice afresh within a period of four weeks after giving an opportunity of personal hearing to the petitioner to the petitioner. The proper officer shall pass a detailed speaking order.

6. Petition is disposed of in the above All rights and contentions of parties are reserved.