Delhi HC Sets Aside Order for Failure to Consider Petitioner’s Detailed Reply

Oriental Trimex Export Pvt Ltd Vs Commissioner of Delhi Goods And Services Tax & Anr. (Delhi High Court)

In the case of Oriental Trimex Export Pvt Ltd vs Commissioner of Delhi Goods And Services Tax & Anr., the Delhi High Court addressed the legality of an order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act), concerning a demand raised against the petitioner, Oriental Trimex Export Pvt Ltd (the petitioner). The court’s decision primarily focused on procedural fairness and the duty of the tax authority to consider the petitioner’s detailed submissions before passing an adverse order.

The issue arose from a Show Cause Notice (SCN) dated 02.12.2023, which proposed a substantial demand of Rs. 3,11,54,338.00 against the petitioner. The notice alleged irregularities related to Input Tax Credit (ITC) claims, specifically scrutinizing ITC availed and claims from canceled dealers, return defaulters, and tax non-payers. In response to this SCN, the petitioner diligently filed a comprehensive reply on 15.12.2023, accompanied by supporting documents addressing each allegation raised under different headings.

Despite the petitioner’s detailed response, the impugned order dated 29.04.2024 disposed of the SCN in a manner that the court deemed unsatisfactory. The order merely stated that the petitioner had submitted incomplete supporting documents on the GST Portal in support of availing benefits related to canceled dealers. It directed the issuance of a Demand-cum-Show Cause Notice (DRC-07) for the alleged default amount, without sufficiently engaging with the petitioner’s submissions or providing an opportunity for clarification.