Recently, Hon’ble Delhi High Court in the case of Larsen and Toubaro Limited and Passavant Energy and Environment GMBH JV V/s Commissioner of Delhi Goods And Service Tax And ANR. reported as 2024 (4) TMI 160 held that proper officer committed an error in law of not appreciating detailed reply filed by petitioner to show cause notice and hence the following observation:
“Now, since reply/explanation submitted by the taxpayer is not satisfactory. In view of aforesaid circumstances, the undersigned is left with no other option to create demand ex-parte for the tax amount, in accordance with the provisions of CGST / DGST Act & Rules, 2017, as per discrepancies already conveyed through SCN/DRC-01” is not sustainable.
Read more about this case below:
Facts of the cases
1. Petitioner received a Show Cause Notice dated 23.09.2023 from the Department proposing a demand of Rs. 55,23,524 for the reason excess claim Input Tax Credit (ITC) under declaration of ineligible ITC and ITC claimed from cancelled dealers, return
defaulters and tax nonpayers.
2. Petitioner filed a detailed reply on 18.10.2023, addressing each of the headings mentioned in the Show Cause Notice.
3. Despite the detailed reply, proper officer issued Order-in-Original dated 28.12.2023 disposing of the Show Cause Notice and confirming a demand against the petitioner.
Judgement
4. Hon’ble Court found merit in the petitioner’s arguments and set aside the order dated 28.12.2023 and remitted the matter to the Proper officer for re-adjudication.
5. Hon’ble court also directed that re-adjudication process should include an opportunity for a personal hearing. Proper officer shall issue a fresh speaking order within the prescribed period u/s 75(3) of the DGST Act i.e., 2 years from the date of judgement passed by Hon’ble court.
Paksh Remarks
6. It has been observed that many of the orders passed by Delhi GST department are ex-parte despite detailed representations being filed by assesses. In terms of Hon’ble Delhi High Court judgment dated 22.03.2024, said orders are liable to be set aside as being cryptic. Assesses must analyse their assessment orders in light of their judgement and plan appropriate remedial course of action.
Download 2024_4_TMI_160-HC-Delhi