Case Law Details
Aarem Trad Ex Private Limited Vs Sales Tax Officer & Anr. (Delhi High Court)
In Aarem Trad Ex Private Limited Vs Sales Tax Officer, the Delhi High Court addressed a GST order dated December 22, 2023, which imposed a demand on the petitioner. The petitioner claimed that the demand resulted from a clerical error where Integrated GST credit was mistakenly claimed instead of CGST and SGST credits.
The petitioner argued that this error was minor and that they had notified the authorities in response to the Show Cause Notice. However, the court found that the order did not consider or respond to the petitioner’s detailed reply and merely stated that no payment had been made within 30 days of the notice and that the reply was inadequate.
The court ruled that the order lacked proper reasoning and had not properly reviewed the petitioner’s reply. Therefore, it was set aside. The court remitted the matter to the Proper Officer for re-adjudication, allowing the petitioner to submit additional information and requiring a new order with a thorough examination of the case. The court did not address other challenges related to notifications.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns order dated 22.12.2023 whereby the proceedings under Section 73 of the Central Good and Service Tax Act 2017 have been concluded and a demand has been created against the petitioner.
2. Learned counsel for petitioner submitted that the petitioner had, on account of an error, claimed Integrated GST credit instead of CGST and SGST credit which was a mere bonafide clerical error.
3. He submitted that the amount is still lying to the credit of the petitioner and that the petitioner had duly informed the authorities of the same in response to the Show Cause Notice.
4. He further submitted that the impugned order does not record any finding on the said reply or even advert to the reply filed by the petitioner. It merely states that the reply was not found comprehensive.
5. It is noticed that the order dated 22.12.2023 records that “Since, no payment has been made within 30 days of the issue of the notice by you; therefore, on the basis of documents available with the department and information furnished by you, if any, demand is created for the reasons and other details attached in annexure”.
6. Further, the observation in the impugned order dated 22.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply.
7. The proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that “ since no payments has been made within 30 days of the issue of notice by you and no proper reply/explanation has been received” which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner.
8. Accordingly the Impugned order being bereft of any reasoning is not sustainable and is set aside.
9. The matter is accordingly remitted to the proper officer to re-adjudicating the Show Cause Notice after giving an opportunity of personal hearing to the petitioner.
10. At request of learned senior counsel for the petitioner, we permit the petitioner to file additional reply to the Show Cause Notice within a period of one week from today.
11. The challenge to the subject notifications raised by the petitioner is left open.
12. The petition is allowed in the above terms.
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