Case Law Details
Vishal Investments Vs State of Punjab And Others (Punjab and Haryana High Court)
The Punjab and Haryana High Court considered a petition challenging an order passed under Section 73 of the Punjab Goods and Services Tax Act, 2017, which held the petitioner liable to GST after observing that the petitioner’s explanation to the show cause notice was not satisfactory. The petitioner contended that the order did not assign adequate reasons for rejecting the explanation and sought reconsideration of its response on merits through a reasoned order. The State could not show that the petitioner’s response to the show cause notice had been considered.
The High Court observed that merely stating that the written explanation was not satisfactory was insufficient and that an adjudicating authority exercising a quasi-judicial function is expected to deal with the specific issues raised before it. Referring to a coordinate Bench decision in similar facts, the Court followed the earlier order, allowed the petition, set aside the impugned orders, and remitted the matter to the adjudicating authority for fresh consideration in accordance with law. All pending miscellaneous applications, if any, were also disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. This petition is directed against an order passed under Section 73 of the Punjab Goods and Services Tax Act, 2017, holding the petitioner liable to payment of GST after observing that the petitioner’s explanation to the Show Cause Notice (SCN) was not found satisfactory. The order is challenged on the ground that adequate reasons have not been assigned for the non-acceptance of the petitioner’s explanation to the SCN and, therefore, the reasons, which are the soul of the order, are missing. It is, therefore, submitted that in such circumstances, the authority concerned be directed to consider the petitioner’s response to the SCN, on merits, and pass an appropriate reasoned order in accordance with law.
2. It could not be shown by the learned State counsel that the petitioner’s response to the SCN was accorded any consideration. Merely stating that the written explanation is not satisfactory would not suffice.
An adjudicating authority, while exercising a quasi-judicial function, is expected to deal with the specific issues urged before it, and merely stating that the explanation is not satisfactory cannot subserve the purpose of a valid adjudication.
3. In somewhat similar facts and circumstances, a Co-ordinate Bench of this Court, in CWP No.16293 of 2024 decided on 25.05.2026, also set aside the adjudication order and remitted the matter to the concerned authority for fresh consideration.
4. Following the order passed in CWP No.16293 of 2024, as well as for the reasons recorded above, this petition succeeds and is allowed. The impugned orders are set aside, and the matter stands remitted to the adjudicating authority for fresh consideration of cause in accordance with law.
5. All pending miscellaneous application(s), if any, shall also stand disposed of.
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