Manpower Group Services India (P.) Ltd. V/s Sales Tax Officer{ HIGH COURT OF DELHI}

Manpower Group Services India (P.) Ltd. V/s Sales Tax Officer{ HIGH COURT OF DELHI} :

Date of Order : 28-05-2024

In a recent case before the Delhi High Court, Manpower Group Services India (P.) Ltd. challenged an order issued by the Sales Tax Officer under Section 73 of the Central Goods and Services Tax Act, 2017. Here’s a simplified explanation of the ruling:

Background: Manpower Group Services India (P.) Ltd. received a show cause notice alleging a mismatch in Input Tax Credit (ITC) availed in their GSTR-3B and GSTR-9 returns compared to GSTR-2A. The notice proposed a substantial demand of Rs. 10,04,94,110 along with penalties. Earlier, the company had filed a writ petition arguing that the notice was vague and solely based on the risk of excess ITC availed due to the mentioned mismatch.

Court Proceedings:

1. Response Submission: In compliance with the court’s direction from the previous writ petition (W.P(C) 4700/2024), the petitioner submitted detailed replies on April 18 and April 24, 2024, along with supporting documents.
2. Impugned Order: Despite the detailed responses and documents submitted by the petitioner, the Sales Tax Officer issued an order on April 30, 2024, rejecting the petitioner’s reply as unsatisfactory. The order also referenced audit observations, which the petitioner claimed were erroneous as there was no specific audit conducted on their operations under Section 65 of the CGST Act, 2017.
3. High Court Decision: The Delhi High Court examined the matter and found that the Sales Tax Officer had not adequately considered the detailed replies and supporting documents submitted by the petitioner. The court noted that the officer merely stated the replies were unsatisfactory without providing reasoned analysis or considering the evidence presented.
4. Remand for Re-Adjudication: Given the procedural lapse and inadequate consideration of the petitioner’s submissions, the High Court set aside the impugned order. The court directed the Sales Tax Officer to re-adjudicate the show cause notice afresh. The officer was instructed to provide a fresh opportunity for the petitioner to present their case, including a personal hearing, and to issue a new speaking order within the stipulated period under Section 75(3) of the CGST Act, 2017.
5. Conclusion: The High Court clarified that its decision did not delve into the merits of the tax dispute itself but focused on the procedural fairness and due process. The rights and contentions of both parties were preserved for further proceedings.

Summary: The Delhi High Court ruled in favor of Manpower Group Services India (P.) Ltd., setting aside the Sales Tax Officer’s order due to procedural irregularities. The court directed re-adjudication of the show cause notice, emphasizing the importance of considering detailed submissions and providing a reasoned order in line with statutory requirements.

This case highlights the significance of procedural fairness in tax adjudication processes under GST laws, ensuring that taxpayers are given adequate opportunity to present their case and that tax authorities conduct thorough assessments before making adverse decisions.

Relevant Section : Section 16 and 65 of CGST Act.