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Biba's plea against GST demand of Rs 56 lakhs to be reheard by Dept: Delhi HC [Read Judgment]

By Shreya Agarwal      10 April, 2024 04:23 PM      0 Comments

NEW DELHI: The Delhi High Court has issued notice to the Delhi government on popular indo-western wear brand Biba’s [M/s Biba Fashion Ltd] plea against a Goods and Services Tax (GST) demand of nearly Rs. 56 lakhs, and directed the concerned department to re-adjudicate Biba’s challenge to the tax demand.

Biba had moved court challenging an order passed against it under Section 73 of the Central Goods and Services Tax Act, 2017 (the Act). The order had ruled against Biba, directing it to pay Rs. 56,32,814 against the tax demand and penalty imposed on it.

Section 73 of the Act deals with “Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful-misstatement or suppression of facts”.

Biba submitted that while dismissing its challenge to the tax demand, the ‘Proper Officer’ under Section 73 of the Act had not applied its mind, and not considered the detailed reply filed by it.

Ruling in favour of Biba, after perusing the documents on record, the division bench of Justices Sanjeev Sachdeva and Ravinder Dudeja noted that, the Department in its Show Cause Notice had sought details under separate headings including under declaration of output tax; reconciliation of GSTR-01 with GSRT-09; excess claim Input Tax Credit, etc. 

To this, a detailed reply was furnished by Biba to the Show Cause Notice “giving disclosures under each of the heads”.

However, the Proper Officer had opined that Biba’s reply is incomplete, not duly supported by adequate documents, not clear and unsatisfactory.

Rejecting the Proper Officer’s opinion, the Court reasoned that Biba’s reply was a “detailed reply”, and held that “the Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is incomplete, not duly supported by adequate documents, not clear and unsatisfactory, which ex-facie shows that the Proper Officer has not applied his mind to the reply submitted by the petitioner.”

The Court added that in case the Proper Officer was of the view that any further details were required, the same could have been specifically sought from Biba, however no such details were sought. 

Therefore, ruling in Biba’s favour, the Court remitted the matter back to the Proper Officer for re-adjudication and directed it to “pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act.”

Biba was represented by Mr. Dhananjai Shekhawat, Mr. Archit Jain, Mr. Rishab Singhla and Mr. Sandeep Goyal, Advocates. The Union of India was represented by Mr. Varun Vats.

Cause Title: M/s Biba Fashion Ltd v Govt of NCT of Delhi and Ors

 

[Read Judgment]



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