Gautam Thapar vs. The Proper Officer GST

Held

The Court held that the Order-in-Original dated 27 August 2024 was unsustainable due to the complete absence of reasoning. The Court found that the adjudicating authority's noting of 'Not Agreed With Tax Payer' was insufficient to constitute a reasoned order, violating the principles of natural justice and the statutory requirement for a speaking order. The reasoning was that without an explanation for disagreement, the taxpayer cannot understand the basis of the decision, nor can the decision be subject to meaningful judicial review. Consequently, the Court quashed the impugned order. The Court allowed the respondent revenue authority to proceed afresh with the SCN proceedings, taking into account the petitioner's reply and passing a reasoned and speaking order. All rights and contentions of both parties on merits were kept open. No issue was expressly left undecided.

Facts

The petitioner, Gautam Thapar, filed a writ petition challenging an Order-in-Original dated 27 August 2024. The proceedings originated from a Show Cause Notice (SCN) dated 29 May 2024, to which the petitioner had submitted a reply on 02 July 2024. The impugned order, framed under Section 73 of the Central Goods and Services Tax Act, 2017, merely stated 'Not Agreed With Tax Payer' without providing any reasoning. The respondent revenue authority did not contest this lack of reasoning. The amount in dispute is not specified in the judgment. The procedural history involves the issuance of an SCN, the petitioner's reply, and the passing of an unreasoned order, which is now being challenged.

Key Issues

1. Whether the Order-in-Original dated 27 August 2024, passed under Section 73 of the Central Goods and Services Tax Act, 2017, is sustainable in the absence of any reasoning provided by the adjudicating authority. The petitioner argued that the order is unsustainable due to the complete lack of reasoning, rendering it non-speaking and arbitrary. The respondent conceded to this point and suggested remitting the matter for fresh adjudication. The court had to decide if an order that merely states disagreement with the taxpayer's reply, without elaboration, satisfies the requirements of law, particularly concerning the principles of natural justice and statutory mandates for reasoned orders.