2021 (9) TMI 1009 - HC - GST

Allahabad High Court emphasizes procedural compliance in GST penalty appeal

The Allahabad High Court dismissed the writ petition regarding the violation of natural justice principles in a show cause notice issued under the U.P. ... Maintainability of petition - availability of alternative remedy of appeal - Violation of principles of natural justice - no such reply to the show cause notice was given to the Deputy Commissioner who has issued the notice for imposing penalty - order of penalty is appeallable under Section 107 of the U.P. GST Act, 2017 or not - HELD THAT:- It cannot be said that no opportunity of hearing was given, as, the show cause notice was issued to the petitioner to which he could have filed a reply. If the reply which has been addressed to the Commissioner is the one filed in response to the show cause notice, then, it is a moot point as to whether it is in accordance with law. Moreover, we asked learned counsel for petitioner as to whether opportunity of being heard would necessarily mean a personal hearing, he could not place any decision before the Court that it would be so, therefore, we leave all these questions to be raised before the Appellate Authority by the petitioner. All the pleas, which are being raised herein or which otherwise may be available to the petitioner, can be raised in appeal under Section 107 of U.P. GST Act, 2017, therefore, in view of availability of this efficacious remedy, the petition deserves to be dismissed. Petition dismissed. Issues involved: Violation of principles of natural justice in the issuance of a show cause notice for imposing penalty under the U.P. GST Act, 2017.Analysis:The judgment delivered by the Hon'ble Judges Rajan Roy and Suresh Kumar Gupta of the Allahabad High Court addressed the issue of the maintainability of a writ petition concerning the violation of principles of natural justice in the context of a show cause notice issued for imposing a penalty under the U.P. GST Act, 2017. The court heard arguments from the learned counsel for the petitioner and the Additional Chief Standing Counsel for the State. The Additional Chief Standing Counsel contended that the order of penalty was appealable under Section 107 of the U.P. GST Act, 2017, and therefore, the writ petition should not be entertained. On the other hand, the counsel for the petitioner argued that writ petitions on grounds of violation of natural justice principles are maintainable. The court noted that a show cause notice was indeed issued to the petitioner, and the petitioner claimed to have submitted a reply addressed to the Commissioner, Commercial Tax, Lucknow. However, it was highlighted that the reply should have been submitted online as per the U.P. GST Rules, 2017, and to the Officer who issued the notice, which was not done in this case. The court raised questions regarding whether the opportunity of being heard necessarily required a personal hearing and left these issues to be raised before the Appellate Authority by the petitioner. Ultimately, the court dismissed the writ petition without prejudice to the petitioner's right to avail the remedy of appeal under Section 107 of the U.P. GST Act, 2017, stating that all available pleas could be raised in the appeal process.This judgment underscores the importance of procedural compliance in matters involving the imposition of penalties under the U.P. GST Act, 2017. It clarifies that while writ petitions based on violations of natural justice principles may be maintainable, the availability of an appeal mechanism under Section 107 of the Act provides an efficacious remedy for addressing such issues. The court emphasized the necessity of adhering to the prescribed rules and procedures, including the online submission of replies to show cause notices and ensuring that responses are directed to the appropriate authority. By dismissing the writ petition, the court signaled that the petitioner should pursue redressal through the statutory appellate process, where all relevant arguments and defenses can be appropriately raised and considered.