Deepak Khandelwal Proprietor M/S Shri Shyam Metal vs. The Union Of INDIA & Anr.

Facts

The petitioner, Deepak Khandelwal, proprietor of M/s Shri Shyam Metal, challenged an order dated 29.12.2023, which adjudicated a Show Cause Notice dated 23.09.2023, confirming a demand and penalty against him. The order was passed under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner argued that detailed replies were filed to the show cause notice, but the impugned order was cryptic, failed to address the submissions, and merely stated the reply was unsatisfactory. The petitioner also contended that the time period extended by a Notification dated 31.03.2023 for Section 73(10) contravened Section 168A of the CGST Act. The respondents are the Union of India and another authority.

Held

The Court held that the impugned order dated 29.12.2023 was a non-speaking order. It noted that the petitioner had filed detailed replies to the show cause notice, which contained specific allegations regarding under-declaration of output tax, excess claim of Input Tax Credit (ITC), under-declaration of ineligible ITC, and ITC claims from cancelled dealers, return defaulters, and tax non-payers. However, the impugned order merely stated that the reply was vague and failed to counter the demands without adverting to the petitioner's submissions. The Court found that the GST Officer should have sought clarification or further details if the reply was considered insufficient, and the record did not show any such opportunity was given. Furthermore, the petitioner was not provided with an adequate opportunity for a personal hearing. Consequently, the impugned order and the show cause notice were set aside and remitted to the GST Officer for re-adjudication after providing an opportunity for a personal hearing. The GST Officer was directed to intimate the petitioner about any required details or documents. The issue regarding the validity of the Notification dated 31.03.2023 and its potential contravention of Section 168A was expressly left open for the petitioner to raise in any future proceedings.

Key Issues

1. Whether the impugned order dated 29.12.2023, passed under Section 73 of the CGST Act, 2017, is a non-speaking order that failed to consider the petitioner's detailed reply to the Show Cause Notice dated 23.09.2023? 2. Whether the Notification dated 31.03.2023, extending the time period for Section 73(10) of the CGST Act, 2017, contravenes the mandate of Section 168A of the said Act? Petitioner's arguments: The petitioner argued that the impugned order was cryptic and did not address the specific submissions made in their reply. They also contended that the extension of time under the Notification dated 31.03.2023 violated Section 168A of the CGST Act. The petitioner relied on the principle that orders must be speaking and consider all submissions. Revenue's arguments: The judgment records that the respondents accepted notice, but no specific arguments made by the revenue are detailed in the judgment.