Max Healthcare Institute Limited vs. Union Of INDIA & Ors.

Facts

The petitioner, Max Healthcare Institute Limited, challenged an order dated December 24, 2023, which disposed of a show cause notice dated September 23, 2023, and raised a demand of Rs. 8,22,82,330.00, including penalty, against the petitioner. The order was passed under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner had filed a detailed reply on October 23, 2023, to the show cause notice, which addressed various heads including output tax, excess ITC claim, ineligible ITC, and ITC from cancelled dealers. The petitioner contended that the impugned order was cryptic and did not consider their reply.

Held

The Court held that the impugned order dated December 24, 2023, was not sustainable. The Court found that the Proper Officer had not applied their mind to the detailed reply submitted by the petitioner. The observation that the reply was "devoid of merits" was insufficient without a proper consideration of the petitioner's submissions. Furthermore, if the Proper Officer required further details, they should have specifically sought them from the petitioner, which the record did not reflect. Consequently, the Court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication. The Proper Officer was directed to intimate the petitioner about any required details or documents, after which the petitioner would furnish their explanation and documents. The Proper Officer would then re-adjudicate the show cause notice after providing an opportunity for a personal hearing and passing a fresh speaking order within the period prescribed under Section 75(3) of the Act. The Court clarified that it had not commented on the merits of either party's contentions and reserved all rights. The challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open.

Key Issues

1. Whether the impugned order dated December 24, 2023, passed under Section 73 of the CGST Act, 2017, is sustainable in law, considering the petitioner's contention that their detailed reply to the show cause notice was not adequately considered? Petitioner's Contention: The petitioner argued that the impugned order was cryptic and failed to consider the detailed reply filed by them, which provided full disclosures under each head mentioned in the show cause notice. They contended that the Proper Officer had not applied their mind to the reply and had merely stated it was "devoid of merits" without proper examination. Revenue's Contention: The judgment does not record any specific arguments made by the Revenue or respondents. However, the impugned order itself stated that the taxpayer's reply was "devoid of merits" and that no additional information or documents were submitted during the personal hearing, leaving the undersigned with no option but to issue the demand order.