Failure To Consider Reply On Merits; Delhi High Court Quashes GST Demand Against Max Healthcare

The Delhi High Court has quashed the GST demand of Rs. 8.23 crore against Max Healthcare.

The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that a proper officer had to at least consider the reply on merits and then form an opinion as to whether the reply was devoid of merits. The proper officer merely held that the reply was devoid of merit, which shows that the proper officer has not applied his mind to the reply submitted by the petitioner.

The petitioner/assessee has challenged the order by which the Show Cause Notice proposed a demand against the petitioner has been disposed of, and a demand of Rs. 8,22,82,330.00, including penalty, has been raised against the petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017.

The petitioner submitted that a detailed reply was filed with the Show Cause Notice; however, the order did not take into consideration the reply submitted by the petitioner and was a cryptic order.

The Show Cause Notice shows that the Department has given separate headings under declaration of output tax, excess claim ITC, declaration of ineligible ITC, and ITC claims from cancelled dealers, return defaulters, and tax non-payers. To the Show Cause Notice, a detailed reply was furnished by the petitioner, giving full disclosures under each of the heads.

The court has directed the proper officer to intimate to the petitioner details and documents, as may be required to be furnished by the petitioner. Pursuant to the intimation being given, the petitioner shall furnish the requisite explanation and documents. Thereafter, the Proper Officer shall re-adjudicate the show cause notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3).

Counsel For Petitioner: Harsh Makhija

Counsel For Respondent: Rajeev Aggarwal

Case Title: Max Healthcare Institute Limited Versus UOI

Citation: 2024 LiveLaw (Del) 283

Case No.: WP (C) 3355/2024

Click Here To Read The Order