The Hon’ble Delhi High Court in Spinclabs (P.) Ltd. v. Commissioner of Delhi Goods and Services Tax [W.P. (C) NO. 4187 OF 2024 dated April 10, 2024] held that the adjudicating authority could have asked the assessee to furnish any further details which were required, rather, merely holding that replies furnished are unsatisfactory and not supported with proper calculations/reconciliation, ex-facie shows that the adjudicating authority has not applied his mind, remitted the matter back to the adjudicating authority for re-adjudication.
Facts:
M/s. Spinclabs (P.) Ltd. (“the Petitioner”) was served with 2 show cause notices, both on the same ground with heading “Excess claim Input Tax Credit”; dated September 05, 2023 and September 29, 2023 respectively, against both the show cause notices the Petitioner filed detailed replies.
However, the adjudicating authority did not consider the replies and passed a single order for both show cause notices dated December 31, 2023 (“Impugned Order”).
Aggrieved by the order of the adjudicating authority the Petitioner filed writ before the Hon’ble Delhi High court on the ground that the Petitioner had furnished the detailed replies which were not considered by the adjudicating authority.
Issue:
Whether adjudicating authority is required to seek further clarification from assessee, if he reply furnished is not satisfactory?
Held:
The Hon’ble Delhi High Court in [W.P. (C) NO. 4187 OF 2024 dated April 10, 2024], held as under:
- Observed that, the Petitioner has furnished detailed replies along with supporting documents, therefore, that, the Impugned Order passed by the adjudicating authority is not sustainable.
- Stated that, the adjudicating authority had at least consider the reply on merits and then form an opinion, merely holding that the replies furnished are unsatisfactory and not supported with proper calculations/reconciliation and relevant documents, ex-facie shows that the adjudicating authority has not applied his mind to the replies submitted by the Petitioner.
- Further stated that, if the adjudicating authority was of the view that any further details were required, the same could have been specifically sought from the Petitioner.
- Remitted the matter back to the adjudicating authority for re-adjudication.
Conclusion: The case of Spinclabs (P.) Ltd. v. Commissioner of Delhi Goods and Services Tax highlights the importance of procedural fairness in tax adjudication. The Hon’ble Delhi High Court’s ruling underscores the obligation of assessing authorities to diligently review and consider the submissions made by taxpayers before passing orders. It sets a precedent for ensuring that adjudication processes are conducted with due diligence and fairness, ultimately contributing to a more transparent and equitable tax regime.
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