HC Remanded SCN as Order Was Based on Audit Observations Without Considering Detailed Reply of Assessee

Case Details: Samsung India Electronics (P.) Ltd. v. Union of India - [2024] 163 taxmann.com 339 (Delhi)

Judiciary and Counsel Details

• Sanjeev Sachdeva & Ravinder Dudeja, JJ.
• Puneet Agarwal, Prem Kandpal, Ms Mansi Khurana, Ms Hemlata Rawat & Chetan Kumar Shukla, Advs. for the Petitioner.
• Tanveer Ahmed Ansari, Sr. Panel Counsel, Harpreet Singh, Sr. Standing Counsel, Suhani Mathur, Ashok Kumar Dagar, Ms Pallavi Gupta, Vinod Kumar Sharma & Y.K. Parashar, Advs. for the Respondent.

Facts of the Case

The petitioner was aggrieved by the manner in which the special audit was conducted and the alleged satisfaction recorded by the Proper Officer to proceed further on the Audit Report. It filed writ petition against the show cause notice (SCN) on the ground that the Proper Officer while adjudicating the SCN had not even cared to look at the documents furnished by the petitioner.

High Court Held

The Honorable High Court observed that the comparison of GSTR-2A with GSTR-3B filed by the petitioner clearly showed that there was no excess claim of Input Tax Credit (ITC). However, the Proper Officer merely held that the reply was not substantial to counter the observation of the auditor which ex-facie showed that Proper Officer had not applied his mind to the reply submitted by the petitioner.

Further, the Court noted that if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the petitioner. However, the record did not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details. Therefore, the Court held that the impugned order was not sustainable and liable to be set aside. The Court also directed the department to re-adjudicate the SCN.