Delhi High Court Quashes GST Demand against Max Healthcare Due To Improper Consideration of Reply by Proper Officer

Delhi High Court Quashes GST Demand against Max Healthcare Due To Improper Consideration of Reply by Proper Officer

The Delhi High Court has quashed the GST demand of Rs. 8.23 crore against Max Healthcare. Justices Sanjeev Sachdeva and Ravinder Dudeja noted in their ruling that the proper officer failed to adequately consider the reply on its merits. The court emphasized that the assertion by the proper officer that the reply lacked merit indicated a lack of thorough examination of the petitioner's response.

The petitioner/assessee contested the order adjudicating the Show Cause Notice, proposing a demand against them. In this disposition, a total demand of Rs.8,22,82,330.00, including penalties, was imposed. The order was issued under Section 73 of the Central Goods and Services Tax Act, 2017.

According to the petitioner's counsel, a detailed reply was submitted on 23.10.2023, addressing the issues raised in the Show Cause Notice. However, the court observed that the impugned order failed to adequately consider this reply, rendering it cryptic.

The Department issued the Show Cause Notice with various headings, including the declaration of output tax, excess claim input tax credit (ITC), and other related matters. In response, the petitioner provided a detailed disclosure under each of these heads.

However, the impugned order dismissed the petitioner's reply as unsatisfactory without proper consideration. The court noted that the proper officer failed to analyze the reply on its merits and concluded that it lacked justification or reconciliation.

Furthermore, the court emphasized that if the proper officer deemed additional details necessary, they should have been explicitly requested from the petitioner. Yet, there was no evidence to suggest that such an opportunity was provided.

Consequently, the court set aside the impugned order dated 24.12.2023 and remitted the matter to the proper officer for re-adjudication. The proper officer was directed to communicate any required details or documents to the petitioner and re-examine the case. Upon receiving this notification, the petitioner is obligated to provide the requisite explanation and documents. Following this, the proper officer will re-examine the show cause notice, provide an opportunity for a personal hearing, and issue a fresh speaking order in accordance with the law within the period stipulated under Section 75(3).