Ganesha Vilas vs. The Assistant Commissioner Of CGST And C. Excise

Facts

The petitioner, Ganesha Vilas, represented by its Proprietor G.Navaneetha Kannan, filed a writ petition challenging an order dated 03.02.2025 passed by the Assistant Commissioner of CGST and C.Excise, Madurai-I Division. The impugned order was passed under Section 74(9) of the CGST Act, 2017. The respondent authorities alleged that the petitioner and its group of companies were involved in under-invoicing and supplying goods without accounting for the entire turnover. The petitioner denied these allegations. The petitioner contended that the impugned order lacked proper explanation regarding how the quantum of demand was arrived at and that the reasons for the quantum were not provided. The respondent argued that the order contained appropriate reasons. The petitioner had not filed an appeal against the order.

Held

The Court held that while it was the petitioner's responsibility to produce necessary documents before the Assessing Authority, an opportunity should be granted to the petitioner to appear before the respondent authority again. This would allow the petitioner to provide additional replies and documents in support of their claim for fresh consideration. The Court noted that the impugned order was passed under Section 74(9) of the CGST Act, 2017. The Court reasoned that considering the nature of the business and the arguments made with reference to the quantum, an equitable consideration was warranted. The Court's decision was to allow the writ petition on terms, setting aside the impugned order and remanding the matter back to the respondent for fresh consideration. The ratio decidendi is that even if a petitioner has not fully adduced evidence, a non-speaking order concerning the quantum of demand can be set aside and remanded for fresh consideration upon depositing a portion of the disputed tax.

Key Issues

1. Whether the impugned order dated 03.02.2025, passed under Section 74(9) of the CGST Act, 2017, is cryptic, non-speaking, illegal, arbitrary, and wholly without jurisdiction, particularly concerning the determination of the quantum of demand? The petitioner argued that the impugned order failed to provide a clear explanation or reasoning for the quantum of tax demand determined. They contended that the basis of the escaped turnover itself was questionable and that the order did not detail how the specific quantum was calculated, rendering it non-speaking and liable to be quashed. The respondent argued that the impugned order contained appropriate reasons with reference to the arrival of the quantum. They did not rely on any specific circulars or precedents in their submission.