Case Law Details
Sethia Enterprises Vs Commissioner Delhi Goods And Service Tax And Others (Delhi High Court)
In the case of Sethia Enterprises vs. Commissioner Delhi Goods and Service Tax and Others, the Delhi High Court reviewed a petition challenging an order dated April 24, 2024, which disposed of a Show Cause Notice (SCN) dated December 12, 2023. The SCN proposed a tax demand of ₹12,42,094 against the petitioner under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017. The petitioner argued that despite submitting a detailed reply on January 12, 2024, the impugned order failed to consider their response and was deemed cryptic.
The court issued a notice for the case, which was accepted by the counsel for the respondents, and proceeded with the final disposal of the petition. The petitioner’s counsel contended that the reply to the SCN, which included responses to various issues such as discrepancies in declared turnovers, reconciliation of GSTR-01 with GSTR-3B, and claims of Input Tax Credit (ITC), was detailed and supported by documents. However, the impugned order merely noted that the reply was unsatisfactory due to insufficient documentation and did not provide any substantive reasoning.
Upon examining the case, the court found that the impugned order had not adequately addressed the detailed reply submitted by the petitioner. The order was criticized for stating that the taxpayer did not provide sufficient documents without specifying what was lacking. Furthermore, it was noted that although the petitioner had not appeared for a personal hearing initially, another opportunity for a hearing was provided, which the petitioner did not attend. Despite this, the court observed that the Proper Officer should have given the petitioner a chance to clarify or provide additional documents if needed.
The court concluded that the Proper Officer did not apply his mind to the detailed reply and supporting documents submitted by the petitioner. It held that the observation that the reply was unsatisfactory due to insufficient documentation was unsustainable, given that the petitioner had provided a comprehensive response. Additionally, the Proper Officer had not given the petitioner a specific opportunity to furnish any further details that might have been required.
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