2022 (9) TMI 207 - HC - GST

Department must grant personal hearing and consider documents after representation received but rejected for portal filing

HC held that the petitioner was entitled to a personal hearing because a detailed representation dated 07.01.2022 was received by the Department on ... Right to personal hearing - Principles of natural justice - Opportunity of personal hearing under Section 75(4) of the Central Goods and Services Tax Act, 2017 - Electronic service via GST portal and physical representation - Mode of communication under Section 169 of the Central Goods and Services Tax Act, 2017 - Remand for fresh consideration after hearingRight to personal hearing - Principles of natural justice - Opportunity of personal hearing under Section 75(4) of the Central Goods and Services Tax Act, 2017 - Electronic service via GST portal and physical representation - Physical representation filed by the petitioner, received by the department on 10.01.2022, entitled the petitioner to a personal hearing and could not be ignored merely because it was not uploaded through the portal. - HELD THAT: - The Court found that the petitioner had sent a detailed representation dated 07.01.2022 which was received by the respondents on 10.01.2022 and that this fact was not disputed. While the department stressed that communications are effected through the portal and that personal hearing notices were posted electronically, the Court held that once the department had received the physical representation it ought to have been considered and the petitioner afforded an opportunity to be heard. The Court emphasised the applicability of the principle that an opportunity of personal hearing must be granted where an adverse decision is contemplated, and that denial of consideration of a received representation amounted to denial of the right of representation and principles of natural justice. The Court did not adjudicate the substantive merits of the show cause notices but confined itself to the procedural right to be heard. [Paras 5]Petitioner is entitled to a personal hearing and the department must give opportunity to be heard and consider the documents submitted.Remand for fresh consideration after hearing - Electronic service via GST portal and physical representation - Mode of communication under Section 169 of the Central Goods and Services Tax Act, 2017 - Proceedings on the show cause notices for the specified tax periods were directed to be reconsidered after affording personal hearing and receipt of any documents by the department. - HELD THAT: - The Court directed that the file, now with the second respondent, be processed by fixing a personal hearing date, receiving any documents produced by the petitioner, and then proceeding with the show cause notices (SCN Reference No.223011210520025 dated 30.11.2021 for July 2017 to March 2018 and SCN Reference No.223011210520145 dated 30.11.2021 for April 2018 to May 2018). The Court expressly declined to go into the merits of the departmental contentions and instead remanded the matter for fresh consideration limited to granting hearing, perusing the submitted documents and explanations, and thereafter completing the adjudicatory process. [Paras 6]Department directed to fix personal hearing, consider submissions and documents, and proceed with the show cause notices within three months from receipt of the order.Final Conclusion: Writ petitions disposed directing the department to afford the petitioner a personal hearing, consider the representation and documents received, and thereafter proceed with the show cause notices relating to July 2017 to March 2018 and April 2018 to May 2018; the process to be completed within three months. No order as to costs. Issues:1. Failure to provide an opportunity of personal hearing before passing an adverse decision.2. Dispute regarding the mode of communication for replies and representations.3. Allegations of violation of principles of natural justice.Issue 1: Failure to provide an opportunity of personal hearing before passing an adverse decision:The petitioner contended that the show cause notice for revoking an erroneous refund claim was issued, and a reply was sent within the stipulated time. However, the petitioner claimed that the personal hearing notice was not sent to the portal register of the respondents. The Court emphasized the importance of granting a personal hearing before imposing any adverse decision, as per Section 75(4) of the Central Goods and Service Tax Act, 2017. The Court held that the petitioner deserved a personal hearing to present objections and for the department to consider the documents submitted.Issue 2: Dispute regarding the mode of communication for replies and representations:The respondents argued that all communication between the assessee and the department should be through the portal, including replies to show cause notices. The petitioner, however, highlighted that unregistered dealers may not have portal access and should be allowed to send physical representations. The Court noted that physical representation was sent by the petitioner, received by the respondents, but not considered due to it not being sent through the portal. The Court directed the department to provide the petitioner with a personal hearing opportunity and consider the submitted documents.Issue 3: Allegations of violation of principles of natural justice:The petitioner alleged a violation of principles of natural justice due to the non-consideration of the physical representation sent. The respondents claimed to have served notices through email and the common portal, providing details of personal hearing dates. Despite multiple notifications for personal hearings, the petitioner failed to appear or provide explanations. The Court found that the petitioner had sent a detailed representation, which was received by the respondents, and directed the department to fix a personal hearing date for the petitioner within three months to address the disputed show cause notices.In conclusion, the High Court of Madras directed the department to provide the petitioner with a personal hearing opportunity, consider the objections and documents submitted, and proceed with the show cause notices within a specified timeframe. The writ petitions were disposed of with no costs awarded, and connected miscellaneous petitions were closed.