2022 (9) TMI 484 - HC - GST

Tax Dispute Resolved: Authority's Order Partially Upheld with Procedural Fairness and Opportunity for Detailed Response

HC upheld the tax authority's order with modifications. The Court directed the appellant to submit a detailed reply to the show-cause notice within two ... Validity of adjudication order passed by the respondent authority - full text of the order was not communicated to the appellant - non-speaking order - violation of principles of natural justice - Section 74 (9) of the West Bengal G.S.T. Act, 2017 - HELD THAT:- It is no doubt true that an appeal is a continuation of original proceeding but nevertheless an opportunity before the original authority can never be equated to an opportunity before the first appellate authority. Therefore, the appellant can be granted one more opportunity to submit a proper reply and the adjudicating authority can decide the matter after affording an opportunity of personal hearing to the appellant, which appears to have not been extended before the order dated 19th February, 2021 was passed. The appeals are disposed of modifying the direction issued by the learned single Bench by directing the appellant to treat the order dated 19th February, 2021 as an additional show-cause notice and submit his objection within two weeks from the date of receipt of server copy of this judgment and order - the said authority shall conclude the proceeding and pass a speaking order on merits and in accordance with law as expeditiously as possible but preferably within a period of six weeks from the date on which the personal hearing is concluded. Issues:Challenging adjudication order based on violation of natural justice principles, appeal process, adequacy of reply to show-cause notice.Analysis:The judgment pertains to intra-Court appeals challenging a common order passed in two writ petitions. The appellant contested the adjudication order issued by the respondent authority, alleging a breach of natural justice principles due to incomplete communication of the order and it being a non-speaking order. The Court noted that during the hearing, a speaking order dated 19th February, 2021 under Section 74(9) of the West Bengal G.S.T. Act, 2017 was provided to the appellant. As the appellant was unable to file an online appeal, the Court directed the appellant to submit a hard copy statutory appeal for consideration by the appellate authority. Dissatisfied with this direction, the appellant filed the appeals.Upon hearing arguments from both parties, the Court examined the appellant's reply dated 3rd March, 2020, referenced in the order. The Court found the reply lacking in specifics, with the appellant mainly asserting innocence without addressing the specific allegations against them. The Court highlighted the serious allegations related to fraudulent activities in the export of goods, emphasizing the need for a detailed and appropriate response to a show-cause notice.The Government counsel contended that the appellant could raise all issues before the first appellate authority, supporting the single Bench's decision to order a statutory appeal. The Court acknowledged that an appeal continues the original proceeding but stressed that the opportunity before the original authority differs from that before the appellate authority. Consequently, the Court granted the appellant another chance to submit a proper reply and directed the adjudicating authority to allow a personal hearing for the appellant before making a decision.In conclusion, the Court disposed of the appeals by modifying the single Bench's direction. The appellant was instructed to treat the order dated 19th February, 2021 as an additional show-cause notice and submit objections within two weeks. The Deputy Commissioner of State Tax was mandated to provide a personal hearing to the appellant's representative and issue fresh orders based on merits and law, independent of the previous order. The Court urged expeditious resolution of the proceedings, preferably within six weeks from the conclusion of the personal hearing. No costs were awarded, and the Court directed prompt provision of a certified copy of the order upon formalities' compliance.