Sis Limited vs. Assistant Commissioner (Dgst) Ward 201 203 And 206

Facts

The petitioner, SIS Limited, challenged an order dated December 29, 2023, which disposed of a show cause notice dated September 25, 2023, and raised a demand of Rs 1,51,05,808.00 against the petitioner, including penalty. The order was passed under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner had filed a detailed reply on November 9, 2023, to the show cause notice, which addressed various grounds including declaration of output tax, excess claim of Input Tax Credit (ITC), scrutiny of ITC reversals, ITC to be reversed on non-business transactions and exempt supplies, and under-declaration of ineligible ITC. The petitioner argued that the impugned order failed to consider their detailed reply and was cryptic.

Held

The Court held that the impugned order dated December 29, 2023, was not sustainable. The reasoning was that the Proper Officer had merely stated that the petitioner's reply was incomplete, not duly supported by adequate documents, and unable to clarify the issue, without applying their mind to the merits of the detailed reply submitted. The Court found that the Proper Officer should have considered the reply on merits. If further details were required, the Proper Officer should have specifically sought them from the petitioner, an opportunity that was not provided. Consequently, the impugned order was set aside, and the matter was remitted to the Proper Officer for re-adjudication. The petitioner was granted 30 days to file a further reply, and the Proper Officer was directed to pass a fresh speaking order after providing a personal hearing within the period prescribed under Section 75(3) of the Act. The Court clarified that it had not considered the merits of either party's contentions, and all rights were reserved. The challenge to Notification No. 9 of 2023 was left open.

Key Issues

1. Whether the impugned order dated December 29, 2023, passed under Section 73 of the Central Goods and Services Tax Act, 2017, is sustainable in law, considering the petitioner's detailed reply dated November 9, 2023, was not adequately considered? Petitioner's Contentions: The petitioner contended that their reply dated November 9, 2023, was detailed and supported by documents. They argued that the impugned order was cryptic and failed to consider their reply on merits. The petitioner asserted that the Proper Officer had not applied their mind to the submitted reply. Furthermore, if the Proper Officer required further details, they should have specifically sought them from the petitioner, which did not happen. Respondent's Contentions: The judgment records that the respondent's counsel accepted notice. No specific arguments were recorded for the respondent in the judgment.