A company (petitioner) is contesting a tax demand order issued by the Goods and Services Tax (GST) department. The order, dated December 23rd, 2023, imposed a significant tax penalty on the company.

Grounds for Challenge:

• The company argues that their detailed response to the initial show cause notice (SCN) was completely ignored in the final order.
• The final order simply states the company's reply was "not satisfactory" without providing specific reasons or requesting further clarification.
• The company believes the GST department failed to properly consider their explanation for the disputed tax issues raised in the SCN.

Court's Decision:

The court sided with the company, finding the final order flawed:

• The court deemed the order insufficient as it didn't address the company's response to the SCN.
• The court criticized the GST department for not requesting additional information if they found the initial response unclear.

Outcome:

• The court quashed the original tax demand order.
• The case was remanded back to the GST department for proper re-evaluation.
• The GST department is now required to:
  • Specify the details or documents they need from the company for further clarification.
  • Grant the company the opportunity to respond and provide any requested information.
  • Issue a new, well-reasoned order within the legal timeframe after considering the company's input.

Topic-Mother Dairy Fruit & Vegetable Private Limited Versus Sales Tax Officer

Citation-2024 TAXONATION 950 (DELHI)

Date-13/03/2024

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