Tata Motors Limited vs. Goods And Service Tax Officer (Gsto) Ward 203 & Ors.
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The petitioner, Tata Motors Limited, challenged an order dated 30.04.2024, which disposed of a Show Cause Notice (SCN) dated 29.01.2024 and imposed a demand of Rs. 23,82,40,692.00/- for the Financial Year 2018-19. The SCN was based on findings from a Special Audit conducted under Section 66 of the Central Goods and Services Tax Act, 2017, detailing issues such as late filing of GSTR-1, inaccurate turnover declaration, discrepancies between GSTR-1 and GSTR-3B, excess Input Tax Credit (ITC) availment, and un-reported reverse charge liability. The petitioner filed a detailed reply with supporting documents on 21.03.2024. The impugned order, however, merely stated that the petitioner's reply was unsatisfactory and that a personal hearing opportunity was provided. The petitioner contended that the impugned order was cryptic and did not consider their detailed reply on merits.
Held
The Court held that the impugned order dated 30.04.2024 was not sustainable. The reasoning was that the petitioner had filed a detailed reply with supporting documents, and the proper officer was required to consider this reply on merits. Merely stating that the reply was "not satisfactory" demonstrated a lack of application of mind. The Court noted that if the proper officer required further clarification or documents, they should have specifically sought them from the petitioner, which the record did not reflect. Consequently, the Court set aside the impugned order and remitted the Show Cause Notice to the Proper Officer for re-adjudication. The petitioner was granted 30 days to file a further reply, after which the Proper Officer was directed to pass a fresh speaking order after providing a personal hearing, within the period prescribed under Section 75(3) of the Act. The Court explicitly stated that it had not commented on the merits of the contentions of either party and reserved all rights and contentions. The challenge to Notification No. 9 of 2023 and 56 of 2023 regarding the extension of time was left open.
Key Issues
1. Whether the impugned order dated 30.04.2024, disposing of the Show Cause Notice dated 29.01.2024, is sustainable in law, considering the petitioner's detailed reply dated 21.03.2024 was not adequately considered? (Question of law and mixed fact). Petitioner's arguments: The petitioner argued that the impugned order was cryptic and did not apply its mind to the detailed reply submitted with supporting documents. They contended that the Special Audit Report was mechanically applied as a ground for the SCN without proper application of mind by the proper officer. The petitioner asserted that if further details were required, the proper officer should have specifically sought them, which was not done. Revenue's arguments: The judgment records that the respondents accepted notice and consented to the petition being taken up for final disposal. No specific arguments were recorded for the revenue regarding the merits of the petitioner's contentions.
Sections Cited
Section 66, Section 73, Section 75(3), Section 75(4), Section 73(9)
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Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
JUDGMENT SANJEEV SACHDEVA, J. (ORAL)
Petitioner impugns order dated 30.04.2024 whereby the impugned Show Cause Notice dated 29.01.2024 proposing a demand of Rs. 23,82,40,692.00/- against the petitioner has been disposed of and a demand including penalty has been created against the petitioner for Financial Year 2018-19. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act). WP (C) 8105/2023 2. Issue notice. Notice is accepted by learned counsel appearing for respondent. With the consent of the parties, petition is taken up for final disposal today.
Learned counsel for Petitioner submits that Petitioner had filed a detailed reply dated 21.03.2024, however, the impugned order dated 30.04.2024 does not take into consideration the replies submitted by the Petitioner and is a cryptic order.
Learned counsel for petitioner further submits that one of the grounds in the Show Cause Notice was that an audit was conducted in respect of the petitioner, however, there was no application of mind by the proper officer for issuance of Show Cause Notice and Special Audit Report was mechanically applied as one of the grounds in the Show Cause Notice.
Perusal of the Show Cause Notice dated 29.01.2024 shows that the Department has simply enclosed the findings of the Special Audit conducted by Auditors as per Section 66 of the Act. and no further reasons were given in the said Show Cause Notice. The Special Audit Report gave findings under separate headings i.e., Late filing of GSTR-1; inaccurate declaration of turnover; difference in GSTR-1 and GSTR-3B; excess availment of ITC in GSTR-3B vis a vis GSTR- 2A and GST liability under reverse charge not reported. To the said Show Cause Notice, detailed reply was furnished by the petitioner giving response under each of the heads with supporting documents. WP (C) 8105/2023 6. The impugned order, however, after recording the narration records that the reply uploaded by the taxpayer is not satisfactory. It merely states that “And whereas, it is noticed that the Taxpayer filed reply/explanation within stipulated period is not satisfactory. Further, another opportunity to submit reply and for the sake of natural justice opportunity for Personal Hearing, as per provision of Section 75(4) DGST Act, was also provided to the taxpayer by issuing “REMINDER” through the GST portal. Now, the reply has been examined and found not satisfactory. Hence demand is being created in accordance with the provisions laid down in Section 73(9) of the CGST / DGST Act, 2017, as per discrepancies already conveyed through SCN/ DRC-01.” The Proper Officer has opined that the reply is not satisfactory.
The observation in the impugned order dated 30.04.2024 is not sustainable for the reasons that the reply dated 21.03.2024 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not satisfactory which ex- facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish WP (C) 8105/2023 further documents/details.
In view of the above, the impugned order dated 30.04.2024 cannot be sustained and is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication.
Petitioner may file a further reply to the Show Cause Notice within a period of 30 days from today. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act.
It is clarified that this Court has neither considered nor commented upon the merits of the contentions of either party. All rights and contentions of parties are reserved.
The challenge to Notification No. 9 of 2023 and 56 of 2023 with regard to the extension of time is left open.
Petition is disposed of in the above terms. SANJEEV SACHDEVA, J RAVINDER DUDEJA, J MAY 29, 2024/sk
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.