Chetak Logistics LTD vs. Union Of INDIA & Ors.

Held

The Court held that the impugned order dated August 17, 2024, was unsustainable as it was wholly unreasoned. The Court noted that the Assistant Commissioner had adopted a template response, stating the Petitioner's reply was "not comprehensible, conceivable, not perspicuous and is ambiguous," which demonstrated an abject non-application of mind. This practice had been cautioned against by the Court in previous judgments, yet the officer continued to replicate the identical pattern. The Court found that the order lacked reasons and any application of mind to the reply submitted by the Petitioner. Consequently, the Court quashed the impugned order. The Court also kept open the challenge to certain notifications issued under Section 168A of the CGST Act for future consideration. The show-cause notice was to be heard afresh, and a proper reasoned order was to be passed, leaving all rights and contentions of the parties open.

Facts

The Petitioner, Chetak Logistics Ltd., filed a writ petition challenging an order dated August 17, 2024, passed by the Assistant Commissioner, DGST. This order purportedly discarded the Petitioner's reply to a show-cause notice issued on May 31, 2024, alleging improper declaration of output tax. The Petitioner had submitted a reply on June 28, 2024, and subsequently responded to reminder notices. The impugned order stated that the Petitioner's explanation was "not comprehensible, conceivable, not perspicuous and is ambiguous." The Petitioner pointed out that similar template orders with identical wording had been passed by the same official in previous cases, citing Xerox India Limited v. Assistant Commissioner, ICICI Lombard General Insurance Co. Ltd v. Union of India, and Indian Highways Management Company Limited v. Assistant Commissioner.

Key Issues

1. Whether the impugned order dated August 17, 2024, passed by the Assistant Commissioner, DGST, is a reasoned order, considering the Petitioner's reply to the show-cause notice dated May 31, 2024? 2. Whether the Assistant Commissioner applied his mind to the Petitioner's reply, or merely adopted a template response? Petitioner's Arguments: The Petitioner argued that the impugned order completely discarded their reply without providing any reasons, exhibiting a lack of application of mind. They contended that the language used in the order was identical to that in previous orders passed by the same officer, which had been set aside by this Court. They relied on the decisions in Xerox India Limited v. Assistant Commissioner, ICICI Lombard General Insurance Co. Ltd v. Union of India, and Indian Highways Management Company Limited v. Assistant Commissioner, where similar orders were quashed for being unreasoned. Revenue's Arguments: The judgment does not record any specific arguments made by the Respondent (Union of India & Ors.).