Fabtech Projects And Engineers LTD vs. State Of Assam And Three Ors

Facts

The petitioner, Fabtech Projects and Engineers Ltd., filed a writ petition before the Gauhati High Court. The petitioner had submitted a claim for refund of excess balance in their electronic cash ledger under Sections 49(6) and 54 of the CGST Act, 2017. This refund claim was rejected, and a show cause notice dated June 22, 2022, was issued by the respondent authorities. The petitioner filed a reply to this show cause notice on July 7, 2022, and subsequently sent a reminder on February 16, 2024. The petitioner's prayer was limited to seeking the completion of the adjudicatory process initiated by the show cause notice through a speaking order, as mandated by Section 73/74 of the CGST Act.

Held

The Court held that the adjudicatory process initiated by the show cause notice dated June 22, 2022, must be decided by the competent adjudicating authority. The authority is directed to pass a speaking order in terms of the CGST Act. The reasoning is based on the petitioner's submission that a speaking order is mandated by Section 73/74 of the CGST Act, and the revenue's submission that the adjudication process would be concluded promptly. The ratio decidendi is that statutory requirements for adjudication, including the issuance of a speaking order, must be adhered to by tax authorities. The operative direction is that the adjudicating authority shall complete this exercise within a period of four weeks from the date of receipt of a certified copy of the order, to be furnished by the petitioner.

Key Issues

1. Whether the adjudicatory process initiated by the show cause notice dated June 22, 2022, issued by the respondent authorities, should be completed by a speaking order as mandated under Section 73/74 of the CGST Act, 2017, considering the petitioner had filed a reply and a reminder. Petitioner's contention: The petitioner argued that the adjudicatory process must be concluded with a speaking order as required by Section 73/74 of the CGST Act, 2017, especially since they had already filed their reply and a reminder to the show cause notice. They relied on the statutory mandate for a speaking order in such adjudication. Revenue's contention: The learned standing counsel for the Finance and Taxation Department submitted that they had instructions to conclude the adjudication process at the earliest.