Lodhi Property Company Limited vs. Sales Tax Officer Class Ii Avato Ward 205 Zone 11 Delhi
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The petitioner, Lodhi Property Company Limited, filed a writ petition before the Delhi High Court challenging an order dated 27.04.2024 passed by the adjudicating authority under Section 73(9) of the CGST Act/DGST Act. This order pertained to the tax period April 2018 to March 2019. The Show Cause Notice (SCN) dated 02.12.2023 alleged discrepancies in the petitioner's tax returns (GSTR-09) and also referred to Section 16(2)(c) of the CGST Act/DGST Act, suggesting the petitioner had availed Input Tax Credit (ITC) where suppliers had not deposited the tax. The petitioner responded to the SCN on 29.02.2024, offering explanations and admitting certain mistakes for which the additional amount was deposited. However, the adjudicating authority rejected the reply stating the taxpayer had not properly replied despite opportunities, without addressing the petitioner's contentions.
Held
The Court held that the impugned order dated 27.04.2024 passed by the adjudicating authority was unreasoned. The Court found that the adjudicating authority had not considered the detailed reply submitted by the petitioner, which included explanations, reconciliation of returns, and deposit of admitted tax liabilities. The sole reason provided in the impugned order for rejecting the petitioner's reply was a general statement that the taxpayer had not properly replied despite sufficient opportunities, without addressing the specific contentions raised by the petitioner. Therefore, the Court considered it appropriate to set aside the impugned order. The matter was remanded to the adjudicating authority for a fresh decision. The adjudicating authority was directed to pass a reasoned order after affording the petitioner an opportunity of being heard.
Key Issues
1. Whether the adjudicating authority's order dated 27.04.2024, passed under Section 73(9) of the CGST Act/DGST Act, is a reasoned order, considering the petitioner's reply to the Show Cause Notice dated 02.12.2023. The petitioner argued that the adjudicating authority failed to consider its detailed reply to the SCN, which included reconciliation of returns and admission of certain mistakes for which tax had been deposited. The petitioner contended that the impugned order was unreasoned as it did not deal with any of the contentions raised in its reply, merely stating that the taxpayer had not properly replied despite opportunities. The respondent (Sales Tax Officer) did not record any specific arguments in the judgment.
Sections Cited
Section 73(9), Section 16(2)(c)
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Cause title — parties, addresses and appearances
O R D E R % 18.07.2024
The petitioner has filed the present petition, inter alia, impugning an order dated 27.04.2024 passed by the adjudicating authority under Section 73(9) of the Central Goods & Services Tax Act, 2017 / Delhi Goods and Services Act, 2017 (hereafter CGST Act / DGST Act) in respect of the tax period April, 2018 to March, 2019. 2. The impugned order was passed pursuant to the Show Cause Notice dated 02.12.2023 (hereafter the SCN) alleging that the petitioner had not correctly declared its tax liability in its tax returns (GSTR-09). A plain reading of the impugned SCN indicates that the same was passed on the ground that there was discrepancy in the returns submitted by the petitioner. In addition, the Adjudicating Authority had also referred to Section 16(2)(c) of the CGST Act / DGST Act suggesting that the petitioner had availed Input Tax Credit in regard to supplies in respect of which the supplier(s) had not deposited the tax with the government.
The petitioner, under cover of its letter dated 29.02.2024, responded to 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 03/07/2025 at 21:51:56
the SCN and made detailed submissions. The petitioner also sought to reconcile the returns filed. It is also pointed out that the petitioner had also admitted certain mistakes and agreed to pay the additional amount. The learned counsel appearing for the petitioner submits that the same has since been deposited. However, it is apparent that the Adjudicating Authority has not considered the reply submitted by the petitioner. The only reason set out in the impugned order for rejecting the petitioner’s reply is that “taxpayer has not properly replied / filed explanation despite of sufficient and repeated opportunities”. The impugned order has not dealt with any of the contentions raised by the petitioner.
It is apparent that the impugned order is unreasoned. Accordingly, we consider it apposite to set aside the impugned order and remand the matter to Adjudicating Authority for decision afresh. It is so directed.
The adjudicating authority shall pass a reasoned order after affording the petitioner an opportunity of being heard.
The petition is disposed of in the aforesaid terms. All pending applications are also disposed of. VIBHU BAKHRU, J SACHIN DATTA, J JULY 18, 2024 ‘gsr’ Click here to check corrigendum, if any 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 03/07/2025 at 21:51:56
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.