Arrow Aircraft Sales And Charters Private Limited vs. Sales Tax Officer Class Ii Avato Ward 202 Zone 11 Delhi & Ors.

Facts

The petitioner, Arrow Aircraft Sales and Charters Private Limited, filed a writ petition challenging Notification No. 9 of 2023 dated March 31, 2023, which extended the limitation period for exercising powers under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner also challenged an order dated December 31, 2023, which concluded proceedings under Section 73 and created a demand against the petitioner. The petitioner had received a Show Cause Notice on September 24, 2023, and submitted a detailed reply. However, the impugned order stated that no proper reply was received despite opportunities, indicating the tax-payer had nothing to say.

Held

The Court held that the impugned order dated December 31, 2023, was not sustainable. The Court found that the proper officer had failed to consider the detailed reply submitted by the petitioner. The observation in the order that no proper reply was received was unsustainable as it indicated that the proper officer had not even reviewed the petitioner's submission. The Court reasoned that the proper officer was obligated to consider the reply on merits and then form an opinion on its sufficiency. Accordingly, the Court set aside the impugned order dated December 31, 2023, and remitted the matter to the proper officer for re-adjudication of the show cause notice issued under Section 73 of the Act. The re-adjudication is to be completed within four weeks after providing an opportunity of personal hearing to the petitioner. The challenge to Notification No. 9 of 2023 was expressly left open.

Key Issues

1. Whether the impugned order dated December 31, 2023, which concluded proceedings under Section 73 of the Central Goods and Services Tax Act, 2017, is sustainable, given that the petitioner had submitted a detailed reply to the Show Cause Notice. (Question of mixed law and fact, turning on Section 73 of the CGST Act, 2017). Petitioner's contention: The petitioner argued that the impugned order was unsustainable because it failed to consider the detailed reply submitted by the petitioner. The order erroneously stated that no proper reply was received, which ex-facie indicated that the proper officer had not reviewed the petitioner's submission. Revenue's contention: The judgment records no specific argument from the revenue regarding the sustainability of the order dated December 31, 2023, beyond what is stated in the impugned order itself.