M/S Star Foods And Beverages vs. State Of Punjab And Another

Facts

M/s Star Food and Beverages (the petitioner) received a show cause notice dated 25.09.2023 under Section 74 of the CGST Act, 2017, pertaining to the tax period April 2018 to March 2019. The petitioner filed a detailed response on 25.10.2023. During personal hearing, the petitioner presented evidence. However, the impugned adjudication order dated 24.04.2024, passed by the respondents (State of Punjab and another), was found to be a virtual copy of the show cause notice. It merely stated that the petitioner's response was not satisfactory, without providing justification or considering the evidence produced.

Held

The Court held that the impugned adjudication order dated 24.04.2024 was passed without any application of mind. The reasoning was that the order was a virtual copy of the show cause notice and did not consider the petitioner's detailed written response dated 25.10.2023, nor the evidence produced by the petitioner during the personal hearing. The Court found that the order simply stated the petitioner's response was not satisfactory without providing any justification. Consequently, the adjudication order was set aside. The respondents were granted liberty to proceed afresh against the petitioner in accordance with law. The ratio decidendi is that an adjudication order must demonstrate independent application of mind and consider all evidence and submissions made by the assessee, rather than being a mere reproduction of the show cause notice.

Key Issues

1. Whether the impugned adjudication order dated 24.04.2024, passed under Section 74 of the CGST Act, 2017, is liable to be set aside for being passed without application of mind and without considering the evidence produced by the petitioner? The petitioner argued that the adjudication order was a verbatim reproduction of the show cause notice and failed to address the petitioner's detailed response and the evidence submitted. This demonstrates a lack of application of mind by the adjudicating authority. The petitioner contended that the order was therefore unsustainable in law. The respondents did not record any specific arguments in the judgment regarding the application of mind or consideration of evidence. The judgment states that a detailed response was filed by the petitioner and evidence was produced, but the respondents' counter-arguments or defense against the petitioner's claims are not detailed.