M/S. Rpj Polymers Through Its Proprietor Sh. Rahul Jain vs. Union Of INDIA And Ors.

Facts

The Petitioner, M/s. RPJ Polymers, through its proprietor Sh. Rahul Jain, challenged an order dated 28.12.2023, which disposed of a Show Cause Notice (SCN) dated 24.09.2023 and raised a demand of Rs. 1,38,12,142.00, including penalty. The SCN proposed demands related to excess claim of Input Tax Credit (ITC) and ITC claimed from cancelled dealers, return defaulters, and tax non-payers. The Petitioner had filed a detailed reply to the SCN on 24.10.2023. The impugned order, passed under Section 73 of the Central Goods and Services Tax Act, 2017, stated that the Petitioner's reply was not supported by complete relevant documents and that the suppliers from whom ITC was availed had been cancelled. The Petitioner contended that the impugned order was cryptic and failed to consider their detailed reply.

Held

The Court held that the impugned order dated 28.12.2023 was not sustainable. The Court found that the Petitioner had filed a detailed reply with supporting documents, and the Proper Officer's observation that the reply was not supported by complete relevant documents indicated a failure to apply their mind to the Petitioner's submissions. The Court also noted that if further details or documents were required, the Proper Officer should have specifically sought them from the Petitioner, an opportunity that was not provided. Consequently, the Court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication. The Petitioner was directed to file a reply to the SCN within 30 days, after which the Proper Officer was to re-adjudicate, provide a personal hearing, and pass a fresh speaking order within the period prescribed under Section 75(3) of the Act. The Court clarified that it had not commented on the merits of either party's contentions.

Key Issues

1. Whether the impugned order dated 28.12.2023, passed under Section 73 of the Central Goods and Services Tax Act, 2017, is sustainable in law, considering the Petitioner's submission that their detailed reply dated 24.10.2023 was not adequately considered. Petitioner's arguments: The Petitioner argued that the impugned order was cryptic and did not take into consideration the detailed reply submitted by them, which was supported by documents. They contended that the Proper Officer failed to apply their mind to the reply and did not seek further clarification or documents if required. The Petitioner asserted that the observation that the reply was not supported by complete relevant documents was unsustainable. Revenue's arguments: The judgment records that the Petitioner's counsel made submissions, and the respondents' counsel accepted notice. The judgment does not explicitly record any arguments made by the Revenue or State.