2023 (1) TMI 501 - HC - GST

Legal Win: Appeal Granted for Violation of Natural Justice, Hearing Ordered with Recovery Proceedings Stayed

M/s Mahendra Sponge and Power Limited Versus Assistant Commissioner State Tax (SGST) Circle-9, Raipur,

HC allowed the appeal against order declining writ petition. The court found violation of natural justice principles due to denial of personal hearing ... Maintainability of petition - availability of alternative remedy as available under Section 107 of the Chhattisgarh Goods and Services Tax Act, 2017 - invocation of discretionary jurisdiction under Article 226 of the Constitution of India - HELD THAT:- Alternative remedy is not an absolute bar if there is violation of principles of natural justice. Irrespective of the fact as to whether the appellant had filed reply or not, it is evident that the appellant had prayed for a personal hearing, which was, admittedly, not granted to the appellant - it will not be equitable to relegate the appellant to avail alternative remedy. It is observed that at the time of grant of personal hearing, the appellant would be at liberty to press the contention that notice dated 11.10.2021 is not a show-cause notice - the respondent shall pass appropriate orders after granting opportunity of hearing to the appellant within a period of 45 days from the date of hearing. Application disposed off. Issues:1. Appeal against order declining to entertain writ petition due to availability of alternative remedy under Section 107 of the Chhattisgarh Goods and Services Tax Act, 2017.2. Failure to grant personal hearing despite request and misinterpretation of notice as a show-cause notice.Analysis:1. The appeal was filed against an order declining to entertain the writ petition, citing the availability of an alternative remedy under Section 107 of the Chhattisgarh Goods and Services Tax Act, 2017. The learned Single Judge had emphasized the statutory alternate remedy of challenging the impugned order through an appeal under Section 107 of the Act, stating that the discretionary jurisdiction under Article 226 of the Constitution could only be invoked in exceptional circumstances. The appellant argued that the provision in Section 75(4) of the Act, requiring a hearing upon request, was not considered. The Court found that the denial of a personal hearing, despite the appellant's request, was a violation of principles of natural justice, making it inequitable to relegate the appellant to avail the alternative remedy.2. The issue of failure to grant a personal hearing was central to the case, with the appellant contending that requests for a hearing were ignored. The respondent admitted to the lack of a personal hearing, attributing it to the appellant's failure to respond adequately to notices. The Court noted that irrespective of the appellant's reply, the denial of a requested personal hearing was a breach of natural justice. It was observed that the appellant's plea for a personal hearing was not addressed, leading to the conclusion that reiteration of the appellant to the alternative remedy would not be equitable. Consequently, the orders of the Single Judge and the respondent were set aside, emphasizing the importance of principles of natural justice in administrative proceedings.3. The Court directed the respondent to issue a notice for a personal hearing within 10 days, allowing the appellant to contest the nature of the notice in question. It was further ordered that appropriate decisions be made by the respondent after the hearing within 45 days, with a stay on the recovery of the balance amount until a final order is issued post the hearing. The judgment highlighted the significance of granting a fair opportunity for a personal hearing and ensuring adherence to principles of natural justice in administrative and legal proceedings.