Adhunik Traders vs. The Deputy Assistant Commissioner (St)-I

Held

The Court found substantial force in the petitioner's submission that the impugned order was not sustainable in law. It reiterated that orders of public authorities must be supported by reasons and demonstrate consideration of arguments on facts and law. The Court observed that while the petitioner clearly mentioned the suppliers and argued that action should be against them, this aspect was not considered and decided in the right perspective by the 1st respondent. Consequently, the Court held that the impugned assessment order was not sustainable and liable to be set aside. The Court directed the 1st respondent to reconsider the petitioner's objections, afford an opportunity of personal hearing, consider the submissions, and pass an appropriate order in accordance with the governing law and rules expeditiously. The Court did not expressly leave any issue undecided.

Facts

The petitioner filed a writ petition challenging an Assessment-cum-Penalty-cum-Interest Order dated 27.09.2022, passed by the 1st respondent for the tax periods June 2021 to November 2021. The petitioner argued that the order was passed without jurisdiction, without authority, and in violation of natural justice. Specifically, the petitioner contended that despite providing a reply on 02.09.2022, listing the suppliers from whom goods were purchased under tax invoices and e-waybills, and arguing that action should be taken against the suppliers, not the receiver, the 1st respondent rejected the reply without proper consideration or assigning reasons. The impugned order stated that the petitioner's reply and case laws were verified and found not tenable, citing Section 155 of the CGST Act, which places the burden of proof on the person claiming input tax credit.

Key Issues

1. Whether the impugned Assessment-cum-Penalty-cum-Interest Order dated 27.09.2022, passed by the 1st respondent, is without jurisdiction, without authority, and violative of the principles of natural justice, particularly concerning the consideration of the petitioner's objections and submissions under Section 155 of the CGST Act. Petitioner's Arguments: The petitioner argued that the 1st respondent failed to consider their detailed reply dated 02.09.2022, which clearly identified the suppliers and provided tax invoices and e-waybills. They contended that the respondent did not appreciate that action should be initiated against the suppliers and not the receiver. The petitioner further argued that the respondent's rejection of their reply and reliance on Section 155, stating the burden of proof lies on the claimant of input tax, was done without proper consideration and without affording an opportunity to substantiate their reply. They relied on case laws suggesting the supplier is responsible, not the receiver. Revenue's Arguments: The judgment does not record specific arguments made by the revenue or State. It only mentions that Sri Vivekananda, learned Government Pleader for Commercial Tax, appeared.