In the intricate world of tax compliance and regulation, the State GST Department’s approach to adjudication for the financial year 2017-18 under Section 73 of the Act has stirred significant concern among taxpayers and legal experts alike. The recent flood of non-speaking and cryptic orders has unveiled a pressing challenge that threatens the principles of fairness and transparency in the tax adjudication process. This article delves into the heart of the matter, uncovering the implications of these issues and proposing viable solutions to navigate this complex landscape.
The Adjudication orders for the financial year 2017-18 have already been issued under Section 73 of the Act, unless otherwise where stay is granted by courts as the case may be. However, what has come to the table of the hon’ble courts is something that the department must consider before passing of the adjudication orders for the financial year 2018-19. By now, it is understood that it is the common portal, vide use of big data software’s, the SCN’s have been issued without much cognizance to the actual facts of the case.
In view of the same, & the heavy reliance placed on technology without application of actual efforts to the adjudication, the orders have passed either dropping the demand, or determining the demand. What is shocking is that despite the fact that detailed submissions have been filed, explanations have made in the personal hearing at unusually stringent time & date specified in the notice itself, the orders are passed merely stating that reply is unsatisfactory & not duly supported by adequate documents. Not a word has been mentioned for the taxpayer to even put forth any thought on what was unsatisfactory or what was found to be inadequate.
Naturally, now the taxpayer is left with only two options. One is to file an appeal u/s 107 before the Appellate Authority by deposit of 10% of demand by the cryptic & non-speaking order, or approach the Honourable High Courts for setting aside the order in view of the violation of the principle of natural justice.
The Honourable High Court of Delhi, has on the day of 12th February 2024, alone set aside four impugned orders issued by the department which were merely a formality in the name of order & devoid of any basis for the conclusion arrived at the order. The four cases are as follows:
- Paras Enterprises, W.P (C) No. 1983/2024
- Oswal Agencies Pvt Ltd, W.P (C) No. 208/2024
- GAC Shipping India Pvt Ltd, W.P (C) No. 1969/2024
- Federal Bank Ltd, W.P (C) No. 1960/2024
The court has set aside the orders issued & remanded the matter to the proper officer for re-adjudication.
Only time will tell, how many more such cases could have been avoided for the proper officer would have applied their minds into adjudication. It is evident that while technology can play a crucial role in improving efficiency, it should not overshadow the need for human judgment and thorough consideration of the facts. The strict timelines imposed for passing orders may have unintended consequences, leading to rushed decisions and increased litigation.
The strict timelines for passing of order which are often extended were made with the objective of reducing the time cost of litigation. However, what can be seen is that such strict timelines are in fact leading to unnecessary & completely avoidable litigations.
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