Order Date – 14 March 2024

Parties: Ethos Limited Vs Assistant Commissioner Department of Trade and Taxes & Anr.

Facts –

• The Petitioner, Ethos Limited, was served with a show casue notice to reverse ITC on non-business transactions & exempt supplies and under declaration of ineligible ITC. The petitioner furnished a detailed reply by giving full disclosures under each of the heads.
• However, impugned order dated 23.12.2023 was passed without taking into consideration of the reply submitted by the petitioner.

Issue –

• Whether the order passed without taking into consideration of the reply is a cryptic order?

Order –

• The Divisional Bench of Hon’ble High Court observed that the impugned order dated 23.12.2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was unsatisfactory, incomplete and not duly supported by adequate documents. He merely held that the reply is not clear and unsatisfactory which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner.
• Further, if the Proper Officer was of the view that the reply is unsatisfactory and if any further details were required, the same could have been specifically sought from the petitioner. However, the record does not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details.
• In view of the above, the order cannot be sustained, and the matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 23.12.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication.