RCUBE International Vs Sales Tax Officer & Anr. (Delhi High Court)
In a recent ruling, the Delhi High Court addressed a petition filed by RCUBE International challenging an order under Section 73 of the Central Goods and Services Tax Act, 2017. The case revolved around a Show Cause Notice (SCN) proposing a significant tax demand, which was subsequently upheld without proper consideration of the petitioner’s detailed reply.
Background of the Case
The petitioner, RCUBE International, contested an order dated 21.03.2024, which confirmed a tax demand of Rs. 3,50,60,125.00 along with penalties. This order was a result of a Show Cause Notice (SCN) issued on 11.12.2023, which raised issues such as under-declaration of output tax, excessive claim of Input Tax Credit (ITC), scrutiny of availed ITC, and ineligible ITC claims.
In response to the SCN, RCUBE International submitted a detailed reply on 11.01.2024, addressing each issue with supporting documents. However, the Proper Officer dismissed this reply as “devoid of merits without any justification,” leading to the issuance of the contested order.
Petitioner’s Arguments
RCUBE International’s counsel argued that the impugned order did not consider the detailed reply and supporting documents submitted by the petitioner. The order was deemed cryptic and failed to apply judicial mind to the petitioner’s submissions. Furthermore, it was argued that if the Proper Officer required additional information or clarification, such a request should have been made to the petitioner.
Court’s Findings
The Delhi High Court observed that the Proper Officer did not adequately consider the petitioner’s detailed reply. The order merely stated that the reply was devoid of merits without providing any substantive justification. This lack of consideration demonstrated a failure to apply judicial mind, which is essential for a fair adjudication process.
