2026-VIL-1013-KAR
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SGST High Court Cases

GST - Adjudication order passed without consideration of reply and supporting documents filed by assessee, Violation of principles of natural justice, Scope of rectification under Section 161 CGST Act, 2017 - Petitioner filed a rectification application challenging an adjudication order passed under Section 73(9) proposing demands on various grounds including royalty fees, transportation services, indirect income, penalties and fines, unaccounted tax liability, reversal of input tax credit and other matters. The Petitioner had filed detailed replies and submitted supporting documents during various visits before the proper officer but the impugned adjudication order did not discuss or consider the submissions filed in pursuance of personal hearing and did not address the specific contentions and documentary evidence submitted by the Petitioner - Whether an adjudication order passed without considering or appreciating the submissions and documentary evidence filed by the assessee in response to SCN constitutes apparent mistake of record warranting rectification under Section 161 and violates principles of natural justice - HELD - It is the basic right of an assessee and a requirement under principles of natural justice that the proper officer must consider the reply filed by the assessee to the show cause notice and if the proper officer seeks to reject any submission made by the assessee the reasons for such rejection must be clearly stated in the adjudication order. The non-consideration of the reply and supporting documents filed by the assessee in the adjudication order while making demand for differential tax constitutes violation of principles of natural justice as it deprives the assessee of the right to defend - When the assessee has submitted detailed explanation and documentary evidence for specific items like royalty fees, transportation charges, indirect income and other matters, the proper officer is required to pass a detailed speaking order addressing each contention and explaining why the submission is being rejected. The dismissal of rectification application without considering the various contentions raised therein shows that the proper officer has not applied its mind to the matters raised - The impugned order rejecting the rectification application is set aside and the matter is remitted back to the proper officer for reconsideration of the rectification application and the adjudication order afresh with due regard to the submissions and supporting documents filed by the petitioner and in accordance with law – The writ petition is allowed
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