26 Apr Assessment Order Not Sustainable: Importance of Assessee’s Reply
Introduction
In recent legal developments, the assessment process under taxation laws has come under scrutiny, particularly concerning the significance of considering the replies submitted by assesses. The case of Aarem Tradex (P.) Ltd. v. Sales Tax Officer highlights the pivotal role of assessees’ responses in assessment orders. This article delves into the details of the case, examining the facts, issues, and the court’s ruling.
Facts of the case
The case revolves around Aarem Tradex (P.) Ltd. (“the Petitioner”), who filed a writ petition against an order dated December 22, 2023 (“the Impugned Order”) issued by the Revenue Department (“the Respondent”) under Section 73 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). The Impugned Order raised a demand against the Petitioner. The crux of the matter lies in the Petitioner’s contention that a clerical error led to the claim of Integrated GST Credit instead of CGST and SGST Credit.
Issue
The central issue in question is whether an assessment order can be deemed sustainable when the reply filed by the Assessee is not duly considered.
Held
The Hon’ble Delhi High Court, in the case of W.P. (C) No. 2767 of 2024, provided a decisive ruling:
Observations
- The court observed that the only reason recorded by the proper officer in the Impugned Order was the non-payment within 30 days of the notice issued and the purported absence of a proper reply/explanation from the petitioner. This prima facie indicates a failure on the part of the proper officer to even consider the reply submitted by the petitioner.
Noteworthy Points
- It was noted that the proper officer had a statutory obligation to assess the reply submitted by the Petitioner on its merits and form an opinion regarding the sufficiency of the explanation provided.
Opinion
- The court opined that the Impugned Order lacked sustainability as it lacked any cogent reasoning to support its conclusions.
Decision
Consequently, the court set aside the Impugned Order and remitted the matter back for reconsideration, emphasizing the imperative of proper reasoning in assessment orders.
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