Ashok Kumar vs. State Of Haryana And Ors

Facts

The petitioner, Ashok Kumar, received a Show Cause Notice (SCN) under Section 74 of the Goods and Services Tax Act, 2017, from the revenue authorities. The SCN alleged non-inclusion of the value/cost of free diesel provided in relation to GTA services received by M/s Shree Cement Limited. The petitioner submitted a reply, which was deemed unsatisfactory by the impugned order. The petitioner challenged this order before the High Court, arguing that the authority failed to apply its mind to the substance of the reply and merely stated it was unsatisfactory without addressing its merits. The revenue, represented by the State of Haryana and others, appeared on advance notice.

Held

The Court found substance in the petitioner's contention that their reply had not been considered on merits. The Court noted that the impugned order merely stated the reply was unsatisfactory without engaging with its content. Consequently, the Court allowed the petition, setting aside the impugned order. The Court directed that the concerned authority shall be at liberty to pass a fresh order after considering the petitioner's reply on merits. No coercive action shall be taken against the petitioner until fresh adjudication, and any recovery already effected shall abide by the outcome of the final order. The Court expressly did not decide the merits of the SCN itself, focusing solely on the procedural defect in the impugned order.

Key Issues

1. Whether the impugned order, which stated the petitioner's reply was unsatisfactory without adverting to its substance, demonstrates a non-application of mind by the authority, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the matter should be remitted for fresh consideration to allow the authority to pass a reasoned order after considering the petitioner's reply on merits, as suggested by the revenue? Petitioner's Contentions: The petitioner argued that the impugned order was passed without considering the merits of the reply submitted and that a mere statement of dissatisfaction is insufficient. Revenue's Contentions: The revenue conceded that the petitioner's reply on merits had not been considered and suggested remitting the matter for fresh consideration to pass a reasoned order.