Mitchem Impex Through Its Partner Mr Bhavya Gupta vs. Govt Of Nct Of Delhi Through Chief Secretary & Ors.

Facts

The petitioner, Mitchem Impex, challenged an order dated December 29, 2023, which adjudicated a show cause notice dated December 5, 2023, and created a demand against them. The petitioner argued that the impugned order was passed before the stipulated date for filing a response to the show cause notice. The show cause notice, issued under Section 73 of the Central Goods and Services Tax Act, 2017, specified January 5, 2024, as the due date for submitting a reply, and indicated no personal hearing was scheduled. The respondents are the Government of NCT of Delhi and other authorities.

Held

The Court held that the impugned order dated December 29, 2023, was unsustainable and quashed it. The reasoning was that the proper officer adjudicated the show cause notice even before the stipulated due date of January 5, 2024, for the petitioner to file their response. This premature adjudication was found to be contrary to the established procedure. Furthermore, the Court noted that the show cause notice did not grant an opportunity for a personal hearing. Consequently, the matter was remitted to the proper officer for re-adjudication. The petitioner was directed to file their response within 30 days, after which the proper officer was to adjudicate the show cause notice in accordance with the law, providing an opportunity for a personal hearing. The adjudication was to be completed within three months of the petitioner filing their response. The Court expressly left open the challenge to notification No. 9/2023 regarding initial extension and clarified that it had not commented on the merits of the parties' contentions.

Key Issues

1. Whether the impugned order dated December 29, 2023, passed by the proper officer, is sustainable in law when it was adjudicated prior to the stipulated due date of January 5, 2024, for filing a reply to the show cause notice dated December 5, 2023, issued under Section 73 of the Central Goods and Services Tax Act, 2017? Petitioner's contentions: The petitioner contended that the adjudication of the show cause notice before the due date for filing the response violated procedural fairness and statutory timelines. They relied on the explicit dates mentioned in the show cause notice itself. Revenue's contentions: The judgment does not record any specific arguments made by the respondents regarding this issue. However, the court's finding implies that the revenue's action was premature.