Delhi HC Deprecates Practice Of GST Authorities Issuing 'Template Orders', Says Rejection Of Reply To SCN Must Be On Merits
Kapil Dhyani
19 Dec 2024 2:00 PM IST
The Delhi High Court recently granted relief to a logistics company aggrieved by the decision of Assistant Commissioner, GST, rejecting its reply to a show cause notice by way of a 'template' order.
A division bench of Justices Prathiba M. Singh and Amit Sharma observed that a SCN, which seeks to impose further liabilities (including penalties) upon assesses, has to be decided on merits.
The Petitioner was issued a SCN alleging improper declaration of output tax. Though Petitioner filed a reply to the SCN, the same came to be discarded by the Assistant Commissioner, allegedly without any reasons.
At the outset, the High Court noted that the order had merely recorded that the explanation given in Assessee's reply is “not comprehensible, conceivable, not perspicuous and is ambiguous”.
It thus said,
“...the impugned order lacks reasons and also lacks any application of mind to the reply given by the Petitioner. Show-cause notices which seek to impose further liabilities upon assesses, including, penalties etc,. have to be decided on merits and not in such a cavalier manner.”
Petitioner contended that even in the past, identical template orders had been passed.
Court noted one such illustration, the case of ICICI Lombard General Insurance Co. Ltd v. Union of India and Ors. (2024) where the final order passed by the GST department under Section 73 of the CGST Act came to be set aside for “perfunctorily” brushing aside the Assessee's reply to SCN.
In Xerox India Limited v. Assistant Commissioner, Ward 208 (Zone11) DGST and Anr. (2024) also, the High Court had found that the Assistant Commissioner adopted a 'template' where the only reason assigned was that the reply filed was “not comprehensible, conceivable, not perspicuous and is ambiguous”.
“This clearly exhibits an abject non-application of mind and the officer repeatedly employing identical phraseology to deal with such matters,” it was held.
Accordingly, the impugned order was set aside and the Assistant Commissioner was directed to consider the show-cause notice afresh in light of the reply submitted by the Petitioner and pass a proper, reasoned order.
Appearance: Advocates V. Lakshmikumaran, L. Badri Narayanan, Charanya Lakshmikumaran, Yogendra Aldak and Kunal Kapoor for Petitioner; Special Panel counsel Sushil Kumar Pandey for UoI
Case title: Chetak Logistics Ltd v. Union of India
Case no.: W.P.(C) 17270/2024
