M/S Vishal Jewellers vs. State Of Punjab And Others

Facts

The petitioner, M/s Vishal Jewellers, filed a writ petition challenging an order passed under Section 73 of the Punjab Goods and Services Tax Act, 2017. This order held the petitioner liable for GST after deeming their explanation to a Show Cause Notice (SCN) unsatisfactory. The petitioner contended that the order lacked adequate reasons for rejecting their explanation, rendering the adjudication invalid. The State counsel, after obtaining instructions, could not demonstrate that the petitioner's response to the SCN had been considered. The Court noted that a mere statement of dissatisfaction with the explanation is insufficient for a quasi-judicial authority.

Held

The Court held that the impugned order passed under Section 73 of the Punjab Goods and Services Tax Act, 2017, was unsustainable due to a lack of proper reasoning. The Court found that the adjudicating authority had merely stated that the petitioner's explanation was 'not satisfactory' without dealing with the specific issues raised by the petitioner. This failure to provide adequate reasons for rejecting the explanation meant that the adjudication was not conducted in accordance with quasi-judicial principles. The Court relied on a previous decision by a Co-ordinate Bench in CWP No.16293 of 2024, which also set aside an adjudication order for similar reasons and remitted the matter. Consequently, the Court allowed the petition, set aside the impugned orders, and remitted the matter back to the adjudicating authority for fresh consideration of the cause in accordance with law.

Key Issues

1. Whether the order passed under Section 73 of the Punjab Goods and Services Tax Act, 2017, is liable to be set aside for non-assignment of adequate reasons for rejecting the petitioner's explanation to the Show Cause Notice? Petitioner's Contention: The petitioner argued that the impugned order is bad in law as it fails to provide adequate reasons for rejecting their explanation to the SCN. They submitted that the reasons are the 'soul of the order' and their absence vitiates the adjudication. Therefore, the authority should be directed to consider the response on merits and pass a reasoned order. Revenue's Contention: The respondent (State) could not demonstrate that the petitioner's response to the SCN was accorded any consideration. They did not show that the explanation was dealt with specifically, beyond a general statement that it was not satisfactory.