Global Electric Motors vs. State Of Haryana And Others

Facts

The petitioner, M/s Global Electric Motors, received a show cause notice dated 26.11.2024, under Section 73 of the Central Goods and Services Tax Act, 2017, for the financial year 2020-21. The petitioner filed a detailed written response on 20.01.2025. Subsequently, an adjudication order dated 27.02.2025 was passed. Paragraph 3 of this order stated that the petitioner had not filed any reply, while paragraph 4 mentioned that the petitioner's reply was unsatisfactory. This contradiction was not explained by the respondents' counsel and indicated a lack of application of mind by the adjudicating authority.

Held

The Court held that the impugned adjudication order dated 27.02.2025 was vitiated by a complete non-application of mind. This was due to the inexplicable contradiction within the order itself, which first stated that the petitioner had not filed a reply to the show cause notice and then, in the subsequent paragraph, mentioned that the petitioner's reply had not been found satisfactory. The Court found this contradiction to be a significant flaw, indicating a lack of proper consideration of the petitioner's submissions. Consequently, the Court quashed the adjudication order and set aside all subsequent appellate proceedings. However, the State was granted liberty to proceed afresh against the petitioner in accordance with the law. The ratio decidendi is that an adjudication order must demonstrate a clear application of mind and consistency in its findings, particularly concerning the consideration of the assessee's response to a show cause notice.

Key Issues

1. Whether the impugned adjudication order dated 27.02.2025, passed under Section 73 of the Central Goods and Services Tax Act, 2017, is vitiated by a non-application of mind due to contradictory findings regarding the petitioner's response to the show cause notice? Petitioner's contention: The petitioner argued that the adjudication order suffered from a complete non-application of mind, as evidenced by the contradictory statements within the order itself concerning the filing and consideration of the petitioner's reply to the show cause notice. This fundamental flaw rendered the order unsustainable. Revenue's contention: The respondents, represented by the State of Haryana and others, did not present any arguments to counter the petitioner's claim regarding the non-application of mind. Their counsel could not explain the contradiction in the adjudication order.