Tax recovery order quashed after officer denied extension without considering sufficient cause shown by petitioner

Calcutta HC allowed petition challenging recovery of tax dues under Section 73(1). Petitioner sought extension to respond to show cause notice within due date but was denied solely because more than six adjournments were previously granted. HC held that proper officer failed to consider sufficient cause shown by petitioner and exercised power colourably by passing final order without granting extension or personal hearing. Recovery directions dated 15th February 2024 were quashed. Petition allowed in part.

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Issues involved:
The judgment involves issues related to impleading the Assistant Commissioner of State Tax and MR Charge, and challenging an order passed by the respondent under the CGST and WBGST Act, 2017.

Impleading of Assistant Commissioner of State Tax:
The petitioner sought to implead the Assistant Commissioner of State Tax and MR Charge as respondent no. 2. The Court permitted the impleadment based on the arguments presented by the respective advocates. The Department was directed to carry out the necessary amendment, leading to the disposal of the application.

Challenging Order under CGST and WBGST Act:
The writ petition challenged an order passed by the respondent on 6th November, 2023. The petitioner, a Cooperative Society engaged in collecting parking fees, claimed discrepancies in the scrutiny of returns. The respondent issued notices under various sections of the Act, leading to a final order determining liability under Section 73(9). The petitioner sought an extension to respond to the show cause notice, which was denied by the respondent. The petitioner argued that the order was passed without affording a reasonable opportunity of hearing, violating principles of natural justice. The respondent contended that the petitioner was provided with sufficient opportunities and had an alternative remedy through an appeal.

The Court observed that the respondent's actions were a colorable exercise of power and violated the principles of natural justice. The Court held that the petitioner should have been granted an extension and an opportunity for a personal hearing. The recovery notice issued by the respondent was quashed, and the petitioner was directed to file a response to the show cause notice by a specified date. The Court emphasized that the petitioner would not be entitled to further extensions or adjournments.

Conclusion:
The writ petition was partly allowed, and the connected application was disposed of. The Court's directions included quashing the recovery notice, setting a deadline for the petitioner to respond to the show cause notice, and instructing the respondents to schedule a personal hearing. The judgment highlighted the importance of adhering to principles of natural justice and ensuring a fair opportunity for parties involved in legal proceedings.

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