GSTAT Sets Aside Non-Speaking GST Appellate Order, Remands Case Over Failure to Meet 80% Registered Procurement Requirement:

The GSTAT Kolkata Bench has set aside an appellate order issued against Deepsikha Residency and remanded the matter to the Adjudicating Authority for fresh consideration. The Tribunal directed the taxpayer to submit the required documents to support its claim regarding the procurement of inputs and input services from registered suppliers.

The appellant, Deepsikha Residency, in the present case was developing a residential apartment in Kenduadihi, Bankura during the year under consideration, i.e., the Assessment Year 2019-20. When the concerned Proper Officer (PO) reviewed the Profit and Loss Accounts, it was noted that the appellant was liable to pay a tax of 18% under reverse charge for not procuring 80% of the inputs and input services from registered suppliers, as required under Notification No. 3/2019-Central Tax (Rate) dated March 29, 2019.

Consequently, the PO issued an OIO against the appellant under Section 73, demanding an aggregate tax amounting to Rs 7.86 lakh, including interest and penalty.

The appellant, being aggrieved by the PO's demand, challenged the department’s calculation of total procurement before the first appellate authority. However, the appeal was rejected, noting that the appellant had submitted only certain documents, including GSTR-2A, project estimates, financial statements and bank statements. The remaining documents were not produced despite adjournments.

When the case was taken to the Goods and Services Tax Appellate Tribunal (GSTAT), it was observed that the appellate order did not properly discuss the merits of the case and was effectively a non-speaking ex parte order. In such a situation, upholding the impugned order will be a violation of the principles of natural justice. Therefore, the Tribunal set aside the order and remanded the matter to the Adjudicating Authority.

"We remand the case back to the Adjudicating Authority with a direction to the taxpayer to submit the requisite documents and reconciliations, if any, in support of his claim that 80% of value of input and input services have been procured from registered suppliers in terms of Central Notification No. 3/2019- CT(Rate) dated 29th March, 2019 as amended. The documents to be produced by the taxpayer shall be accompanied by a list thereof and the same shall acknowledged by the office of the Adjudicating Authority under proper seal and signature."

The adjudicating authority is directed to provide an adequate hearing opportunity and pass a reasoned order within six months from the date of communication of the Tribunal’s order, dated October 15, 2026.