The Bombay High Court has recently set aside a GST adjudication order and held that an order cannot be a simple reproduction of the show cause notice without independent reasoning. The court held that such orders reflect a complete lack of application of mind and violate the principles of natural justice.
The court’s observations came in a petition filed by GlobeOp Financial Services (India) Private Limited. The company approached the High Court against a GST demand order passed by the Deputy Commissioner of State Tax. The company argued that the order merely repeated the allegations made in the show cause notice and ignored the detailed submissions it had filed in reply.
A bench of Justices M.S. Sonak and Jitendra Jain noted that the adjudicating officer didn’t address the contentions raised by the assessee. Instead, the order reproduced the exact words from the show cause notice, without offering any reasoning or explanation for rejecting the assessee’s reply.
The court held that under Section 73(9) of the CGST Act, the officer must consider the reply and apply their mind before passing an order. The word “consider” implies a careful and deliberate review of the reply, not a mechanical process of repeating allegations. The bench referred to earlier judgments which said that “consideration” requires attention and thoughtful reasoning.
The court also relied on Section 75(6) of the CGST Act, which mandates that the order must state the facts and the basis for the decision. This provision requires that orders reflect independent thinking and reasons that support the conclusion reached. Simply copying the notice does not meet this standard.
Since the order in question showed no sign of proper reasoning or engagement with the assessee’s arguments, the court held that the principles of natural justice were violated. It said that the assessee should not be burdened with the cost and time of filing an appeal in such a case. Instead, the matter was remanded back to the adjudicating authority for fresh consideration.
