Whether the proper officer can pass an order without application of mind on the reply submitted?

No, the Honorable Delhi High Court in Spinclabs (P.) Ltd. v. Commissioner of Delhi Goods and Services Tax [W.P. (C) NO. 4187 of 2024 dated 10.04.2024] held that the adjudicating authority could have asked the assessee to furnish any further details that were required, rather, merely holding that replies furnished are unsatisfactory and not supported with proper calculations/ reconciliation, which ex-facie shows that the adjudicating authority has not applied his mind and remitted the matter back to the adjudicating authority for re-adjudication. The Honorable Delhi High Court noted that the Petitioner has furnished details replies along with supporting documents; therefore, the impugned Order passed by the adjudicating authority is not sustainable.

The Honorable Court stated that the adjudicating authority should at least consider the reply on merits and then form an opinion. Further noted that if the adjudicating authority was of the view that only further details were required, the same could have been specifically sought from the Petitioner.

Author’s Comments

This is a welcome decision by the Honorable High Court of Delhi and it comes to the rescue of the taxpayer and once again the Rule of Land stands tall against the over-passionate administration. The Revenue Department has to understand that this kind of approach renders the “due process” laid down in the statue “Superfluous, unnecessary and nugatory”, which is impermissible in the law.

A similar judgment was delivered by the Honorable Delhi Court in the case of Aarem Tradex (P.) Ltd. Sales Tax Officer [W.P. (C) 2767 of 2024 dated 23.02.2024] wherein it was held that the Assessment Order is not sustainable when devoid of any proper reasoning.