2023 (10) TMI 1076 - HC - GST

GST proceedings upheld after assessee fails to respond to show cause notice under Section 74(9)

The Allahabad HC dismissed a petition challenging GST proceedings where the assessee failed to respond to a show cause notice dated 17.02.2022. The taxing ... Opportunity of personal hearing under Section 75(4) - condonation of delay and limitation for filing appeal under Section 107(4) - Limitation Act inapplicability to a self-contained fiscal statute - GST Council amnesty extension for filing appealsOpportunity of personal hearing under Section 75(4) - Whether the assessee was entitled to an opportunity of personal hearing before passing the order under Section 74(9). - HELD THAT: - The Court found that Section 75(4) mandates an opportunity of hearing only when a request in writing is received from the person chargeable or when an adverse decision is contemplated and a response is furnished. A show cause notice dated 17.02.2022 was not replied to by the assessee and no written request for personal hearing was placed on record. The decisions cited by the assessee were distinguishable because in those cases the notices had been replied to and personal hearing was not afforded; in the present case the assessee did not participate or furnish an explanation. Consequently, the statutory requirement for hearing under Section 75(4) was not attracted and the impugned show cause notice and the order passed on 22.03.2022 did not warrant interference on this ground. [Paras 10, 11, 15]The challenge to the notice dated 17.02.2022 and the order dated 22.03.2022 on the ground of denial of personal hearing is rejected.Condonation of delay and limitation for filing appeal under Section 107(4) - GST Council amnesty extension for filing appeals - Limitation Act inapplicability to a self-contained fiscal statute - Whether the appeal, dismissed as time-barred by the Appellate Authority, should be reconsidered in view of the GST Council's amnesty extension announced at its 52nd Meeting. - HELD THAT: - The Court noted that Section 107(4) provides a limited power to condone delay (further period of one month) where the Appellate Authority is satisfied of sufficient cause; the Appellate Authority had dismissed the appeal for delay after finding no sufficient cause. While recognizing the principle (as held in cited authorities) that the CGST Act is a self-contained fiscal code and the Limitation Act is not ordinarily applicable, the Court observed that the GST Council had subsequently announced an amnesty extension in its 52nd Meeting. Given this subsequent executive/policy measure, the Court did not finally adjudicate entitlement to the benefit but considered it appropriate to remit the matter. The appellate order dated 11.08.2023 was therefore set aside to the extent that the appeal is remanded to the Appellate Authority to examine the question of limitation afresh in the light of the GST Council's amnesty scheme and to pass appropriate orders consistent with that consideration. [Paras 12, 13, 14, 15]The appellate order dismissing the appeal as time-barred is set aside in part and the matter is remanded to the Appellate Authority to reconsider limitation and condonation in light of the GST Council's amnesty extension.Final Conclusion: The writ petition is disposed: the challenge to the show cause notice and taxing order is rejected, but the appellate order dated 11.08.2023 is set aside to the extent that the appeal is remanded to the Appellate Authority to reconsider limitation/condonation in light of the GST Council's amnesty extension and pass an appropriate order. Issues involved:The issues involved in the judgment are (1) whether personal hearing should have been given to the petitioner before the order was passed by respondent No.2 in proceedings under Section 74, and (2) whether the period of limitation in filing the appeal stood extended pursuant to the 52nd Meeting of the GST Council held on 7th October, 2023 and if the benefit should be passed on to the petitioner.Issue 1: Personal HearingThe petitioner, a proprietorship firm registered under the UPGST Act and CGST Act, was issued a notice under Section 74(1) of the Act on 17.02.2022, regarding a dispute for the period June 2019, Financial Year 2019-20. The Taxing Authority passed an order imposing penalty and interest on 22.03.2022, which was appealed by the petitioner but dismissed on 11.08.2023 due to delay. The petitioner contended that no personal hearing was provided before the final order was passed, citing relevant case laws. However, the Court found that as the petitioner did not reply to the notice, the provisions of Section 75(4) requiring an opportunity of hearing were not attracted, and hence, the order was upheld.Issue 2: Extension of Limitation PeriodThe petitioner argued that the period of limitation for filing the appeal should be extended based on the decision of the 52nd Meeting of the GST Council. The Court noted that the appeal did not provide sufficient grounds for condoning the delay, and as per Section 107(4) of the Act, the Appellate Authority rightly dismissed the appeal due to the expired limitation period. Citing legal precedents, the Court emphasized that the Act is a special statute with an inbuilt mechanism excluding the application of the Limitation Act. However, considering the GST Council's extension of the limitation period till 31st January 2024 under an amnesty scheme, the Court remanded the matter back to the Appellate Authority for reevaluation.ConclusionThe Court found no interference necessary in the notice issued by respondent No.2 on 17.02.2022 and the consequential order passed on 22.03.2022. However, the appellate order of 11.08.2023 was set aside, and the matter was remanded back to the Appellate Authority for a fresh consideration, especially regarding the limitation period in light of the GST Council's amnesty scheme. The writ petition was disposed of with these observations.