Delhi High Court
M/S Central Govt Employees Consumer ... vs Commissiioner State Goods And Service ... on 24 April, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 24.04.2024
W.P.(C) 3873/2024 & CM APPL. 15976/2024
M/S CENTRAL GOVT EMPLOYEES CONSUMER COOP
SOCIETY LTD POPULARY KNOWN
AS KENDRIYA BHANDAR ..... Petitioner
versus
COMMISSIIONER STATE GOODS AND SERVICE TAX DELHI
& ANR. ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Ruchir Bhatia and Ms. Deeksha Gupta,
Advocates.
For the Respondent: Mr. Rajeev Aggarwal, ASC.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns order dated 31.12.2023 whereby the
impugned Show Cause Notice dated 24.09.2023 proposing a demand
of Rs 17,89,56,282.00/- against the petitioner had been disposed of
and demand including penalty has been raised against the petitioner.
The order has been passed under Section 73 of the Central Goods and
Services Tax Act, 2017 (hereinafter referred to as the Act).
2. Issue notice. Notice is accepted by learned counsel appearing
for respondent. With the consent of the parties, petition is taken up for
final disposal today.
3. Learned counsel for Petitioner submits that Petitioner had filed
a detailed reply dated 20.10.2023, however, the impugned order dated
31.12.2023 does not take into consideration the reply submitted by the
Petitioner and is a cryptic order.
4. Perusal of the Show Cause Notice dated 25.09.2023 shows that
the Department has given reasons under separate headings i.e., under
declaration of output tax; excess claim of Input Tax Credit ["ITC"];
Scrutiny of ITC availed; ITC to be reversed on non-business
transaction and exempt supplies; under declaration of ineligible ITC
and ITC claimed from cancelled dealers, return defaulters and tax non
payers. To the said Show Cause Notice, a detailed reply was furnished
by the petitioner giving disclosures under each of the heads.
5. The impugned order, however, after recording the narration
records that no proper reply/ explanation have been received from the
Taxpayer. It states that "And whereas, the Taxpayer was allowed
opportunity to explain Tax deficiencies during Personal Hearing
before Proper Officer on the given date and time, Further, another
opportunity to submit reply and observing Principles of natural
justice, opportunity for Personal Hearing, as per provision of Section
75(4) CGST/DGST Act, was also provided to the taxpayer by issuing
"REMINDER" through the GST portal. Now, since no proper reply /
explanation have been received from the Taxpayer despite sufficient
and repeated opportunities, which indicate that the Taxpayer has
nothing to say in the matter. And whereas, further as per Section 73(7)
Notice of tax and interest is to be given while Section 73(9) prescribes
for imposition of penalty equivalent to 10% of tax or Rs. 10000/-
whichever is higher in case reply is not found to be satisfactory. Now,
therefore, the undersigned is left without any option and accordingly,
a demand is being created towards Tax /interest amount already
confirmed through SCN/ DRC-01 (Copy attached) in accordance with
the provisions of CGST / DGST Act fit Rules, 2017." The Proper
Officer has opined that no proper reply/explanation has been received
from the Taxpayer.
6. The observation in the impugned order dated 31.12.2023 is not
sustainable for the reasons that the reply dated 20.10.2023 filed by the
Petitioner is a detailed reply with supporting documents. Proper
Officer had to at least consider the reply on merits and then form an
opinion. He merely held that the no proper reply/explanation has been
received which ex-facie shows that Proper Officer has not applied his
mind to the reply submitted by the petitioner.
7. Further, if the Proper Officer was of the view that any further
details were required, the same could have been specifically sought
from the Petitioner. However, the record does not reflect that any such
opportunity was given to the Petitioner to clarify its reply or furnish
further documents/details.
8. In view of the above, the impugned order dated 31.12.2023
cannot be sustained, and the matter is liable to be remitted to the
Proper Officer for re-adjudication. Accordingly, the impugned order
dated 31.12.2023 is set aside and the matter is remitted to the Proper
Officer for re-adjudication.
9. Petitioner may file a further reply to the Show Cause Notice
within a period of 30 days from today. Thereafter, the Proper Officer
shall re-adjudicate the Show Cause Notice after giving an opportunity
of personal hearing and shall pass a fresh speaking order in
accordance with law within the period prescribed under Section 75 (3)
of the Act.
10. It is clarified that this Court has neither considered nor
commented upon the merits of the contentions of either party. All
rights and contentions of parties are reserved.
11. Petition is disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
APRIL 24, 2024/vp
