GST: High Court Quashes GST Demand Over Cut-Paste Order Without Mind Application

While passing an order, the Tax authority or the concerned officer is required to consider all the replies and submissions made by the taxpayer. Based on the submissions and response filed by the taxpayer, the officer must pass a reasonable, speaking order. The Madras High Court has recently ruled in a case where the petitioner company’s reply was ignored while passing the final order. Read below to understand what happened in this case.

The GST department conducted an inspection at the petitioner’s premises on 11.07.2024 and 12.07.2024. A statement was recorded from the Director during inspection, and the petitioner submitted a reply on 15.07.2024. The department issued a Show Cause Notice (SCN) on 09.01.2025, to which the petitioner responded again with a detailed reply on 08.04.2025, along with more than 200 pages of supporting documents.

However, the GST department ignored the 200-page reply, and they claimed that the petitioner did not avail the opportunity to reply to the inspection officer during the inspection. The final order claimed that the petitioner merely repeated the old reply and failed to respond properly. Therefore, the petitioner approached the Madras High Court to challenge the final order.

The Madras High Court observed that the officer did not apply his mind while passing the final order. The officer is required to analyse the records and then come to a valid conclusion. Since the officer failed to do the same, it made the order cryptic, non-speaking, and unreasonable. Therefore, the High Court quashed the order and remanded the matter to the GST authority for fresh consideration and to pass a new order within three months, after giving an opportunity of personal hearing to the petitioner.