Nspira Management Services Private Limited vs. The Sales Tax Officer & Ors.

Held

The Court held that the impugned final order dated 31 August 2024, passed under Section 73 of the CGST Act, 2017, is wholly unreasoned and liable to be set aside. The Court found that the GST Officer had adopted a template where the sole reason for confirming the demand was that the taxpayer's reply was "not comprehensible, conceivable, not perspicuous and is ambiguous." This repetitive use of identical phraseology, despite previous cautions from the Court, demonstrates an abject non-application of mind. The Court quashed and set aside the impugned order. It directed that the respondents may proceed afresh with the SCN proceedings in accordance with the law, taking into account the reply submitted by the writ petitioner. All rights and contentions of the respective parties on merits were kept open. The challenge to Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax was expressly left open to be addressed in appropriate proceedings.

Facts

The petitioner, NSPIRA MANAGEMENT SERVICES PRIVATE LIMITED, has challenged a final order dated 31 August 2024, passed by the GST Officer under Section 73 of the Central Goods and Services Tax Act, 2017. This order confirmed a demand against the petitioner for the tax period April 2019 to March 2020. The petitioner had previously submitted a reply to a Show Cause Notice (SCN) dated 29 May 2024. The GST Officer's order stated that the petitioner's reply was not comprehensive, conceivable, or perspicuous, and no one appeared for a personal hearing, leading to the confirmation of the demand. The Court notes that similar orders have been challenged in previous writ petitions.

Key Issues

1. Whether the final order dated 31 August 2024, passed under Section 73 of the CGST Act, 2017, is vitiated by a non-application of mind and is therefore liable to be set aside? Petitioner's arguments: The petitioner contends that the impugned order suffers from a complete non-application of mind by the GST Officer. They argue that the officer has adopted a template-like reasoning, merely stating that the reply filed was "not comprehensible, conceivable, perspicuous and ambiguous" without engaging with the substance of the petitioner's response. This identical phraseology, used in previous cases before this Court, indicates a failure to properly adjudicate the matter. The petitioner relies on the Court's previous decisions in Xerox India Limited vs. Assistant Commissioner, DGST & Anr. and Indian Highways Management Company Limited vs. Assistant Commissioner & Anr., which dealt with similar unreasoned orders. Revenue's arguments: The judgment does not record any specific arguments made by the respondents (The Sales Tax Officer & Ors.).