M/S Motilal And Sons vs. Assistant Commissioner Dgst Ward 201, 207, 208 & Anr.
Original PDF →Facts
The petitioner, M/s Motilal and Sons, challenged a final order dated August 20, 2024, passed under Section 73(9) of the Central Goods and Services Tax Act, 2017. This order followed a Show Cause Notice (SCN) dated May 29, 2024, concerning the period April 2019 to March 2020. The petitioner had submitted a reply on June 26, 2024, but did not attend the scheduled personal hearing on July 2, 2024. A reminder was issued, and a fresh personal hearing was fixed for August 1, 2024, which the petitioner also failed to attend. The authority noted that the petitioner's written explanation was not comprehensible and ambiguous, and no explanation was provided due to the absence from the personal hearing, leading to the confirmation of the demand.
Held
The Court held that the impugned final order dated August 20, 2024, passed under Section 73(9) of the CGST Act, was unsustainable because it was bereft of any reasoning. The Court noted that the authority's observation that the petitioner's reply was not satisfactory was insufficient. The Court accepted the respondent's submission that the ends of justice would be better served by allowing the authorities an opportunity to revisit the issue. Consequently, the Court quashed the impugned order and directed the competent authority to dispose of the Show Cause Notice afresh, taking into account the observations made by the Court. All rights and contentions of the parties on merits were kept open. No specific amount in dispute was mentioned in the judgment.
Key Issues
1. Whether the final order dated August 20, 2024, passed under Section 73(9) of the CGST Act, is sustainable in law, considering the petitioner's contention that it is bereft of any reasoning. 2. Whether the respondents should be granted an opportunity to revisit the entire issue, as suggested by the Court, to ensure the ends of justice. Petitioner's Contention: The petitioner argued that the impugned order is unsustainable as it lacks proper reasoning and merely states that the reply was not satisfactory, without elaborating on the deficiencies. The petitioner relied on the principle that orders must be reasoned to be valid. Respondents' Contention: The respondent revenue authority, through its counsel, submitted that instead of keeping the matter on the Court's board, it would be in the interest of justice to allow the respondents an opportunity to re-examine the entire issue.
Sections Cited
Section 73(9), Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2024
CM APPL. 62591/2024 (Ex.) Allowed, subject to all just exceptions. The application stands disposed of. W.P.(C) 14916/2024, CM APPL. 62590/2024 (Interim Relief)
The writ petitioner impugns the final order dated 20 August 2024 framed under Section 73(9) of the Central Goods and Services Tax Act, 2017 [“CGST Act”]. The aforesaid order was preceded by a Show Cause Notice [“SCN”] dated 29 May 2024 and in response to which the petitioner had furnished a detailed explanation. However, the aforesaid has come to be cursorily rejected with the authority observing as follows:- This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/11/2024 at 11:23:37
“The taxpayer M/s Moti Lal & Sons, GSTIN- 07AAAFM7180KlZ2 was served upon a notice under section 73 of CGST/DGST Act, 2017 regarding (Voluntary Payment Intimation, if applicable) along with GST DRC-01vide reference No. ZD070524040619A (Summary of SCN) on 29.05.2024 for the period April-2019 to March-2020, asking him to furnish the reply by 29.06.2024 and avail personal hearing 02.07.2024. In response to DRC-01 issued to the taxpayer u/s 73 of CGST/ DGST Act, 2017 for the year 2019-20, the taxpayer filed reply through DRC-06 on 26.06.2024, but not availed personal hearing on the scheduled date.
Observing the principle of natural justice reminder was issued on 26.07.2024 and personal hearing was fixed for 01.08.2024. However, till date none has appeared in personal hearing to explain the issues mentioned in the Show Cause Notice.
In view of the above, the taxpayer has failed to attend the personal hearing despite ample opportunity and after having gone through the reply filed by the taxpayer in r/o following points raised in the Show Cause Notice.
(1) Reconciliation of GSTR-01 with GSTR-09 (2) Reconciliation of E-way bill turnover with GSTR-0 1 (3) Scrutiny of ITC availed (4) ITC to be reversed on non-business transactions & exempt supplies
The explanation given in the reply is not comprehensible, conceivable, not perspicuous and is ambiguous.
Apart from above, no explanation could be given in want of personal hearing by the taxpayer till date. Therefore, the proposed demand mentioned in the Show Cause Notice is confirmed”
As is manifest from the above, all that the competent authority has chosen to observe is that the reply has not been found to be satisfactory. Since the order impugned is bereft of any reasoning, it is rendered unsustainable.
On our expressing the aforesaid opinion, Mr. Aggarwal, learned counsel for the respondent, submitted that rather than the matter being retained on our board, the ends of justice would warrant the respondents being accorded an opportunity to revisit the entire issue.
Accordingly, we allow the present writ petition and quash the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/11/2024 at 11:23:37
impugned order dated 20 August 2024.The competent authority shall now proceed to dispose of the SCN afresh and bearing in mind the observations made hereinabove.
All rights and contentions of respective parties on merit are kept open.
YASHWANT VARMA, J.
RAVINDER DUDEJA, J. OCTOBER 23, 2024/DR
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/11/2024 at 11:23:37
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.