2024 (5) TMI 513 - HC - GST

Tax Order Challenged: Procedural Flaws Expose Unfair Hearing, Appellant Granted Fresh Opportunity to Present Evidence

Roshan Sharma Versus Assistant Commissioner of Revenue, State Tax, West Bengal & Ors.

HC remanded tax adjudication order after finding procedural irregularities. Appellant was denied effective opportunity to cross-examine and rebut ... Maintainability of petition - availability of alternative remedy - cancellation of the registration of the selling dealer with retrospective effect - Opportunity of cross-examine not provided - violation of principles of natural justice - HELD THAT:- It is no doubt true that the appellant has an effective alternate remedy by way of an appeal before the statutory appellate authority for which the appellant has to pre-deposit 10% of the disputed tax. However, in the facts and circumstances of the case, the appellant has not been given an effective opportunity to rebut the allegations, which have been made against the supplier and the transporter from whom statement/declaration has been obtained by the authority - Admittedly, the appellant has not been furnished with copies of the same nor has been afforded an opportunity of cross-examination, though such a request was specifically made by the appellant in his reply dated 18th December, 2023. Considering the fact that the appellant had no opportunity to cross-examine Mr. Shyam Sundar Tiwari or Mr. Ashoke Kumar Saha and the statement recorded from them were not furnished to the appellant, this is a fit case, where the matter should be remanded to the adjudicating authority for a fresh decision after affording an opportunity to the appellant - The appellant is bound to prove by proper evidence to establish the movement of goods (purchase/sales). Appeal disposed off. Issues involved: Challenge to adjudication order by Assistant Commissioner of Revenue, State Tax; Effective opportunity to rebut allegations; Furnishing of copies of statements for cross-examination; Validity of registration of selling dealer; Movement of goods proof required; E-way bills as statutory documents; Remand for fresh decision with opportunity for cross-examination; Blocking of credit ledger; Requirement to prove movement of goods; No costs awarded.The judgment addresses the challenge to an adjudication order passed by the Assistant Commissioner of Revenue, State Tax, West Bengal. The appellant, despite having an alternate remedy through an appeal, was found to not have been given an effective opportunity to rebut the allegations made against the supplier and transporter. The appellant was not provided with copies of statements for cross-examination, even though a specific request was made in this regard.Furthermore, the appellant argued that the cancellation of the selling dealer's registration was retrospective, and at the time of transactions, the registration was valid. However, the onus was placed on the appellant to prove the movement of goods. The appellant contended that e-way bills evidenced the transportation of goods to various purchasers and should not be rejected as fake, as they are statutory documents available in the department's portal.Considering the lack of opportunity for cross-examination and the non-furnishing of statements, the court decided to remand the matter to the adjudicating authority for a fresh decision. The appellant was directed to be provided with copies of the statements within a week for a fair adjudication process. The appellant was also allowed to submit further explanations and necessary documents, with the option for cross-examination if requested.Additionally, it was noted that there was a negative balance in the credit ledger, but the blocking of the ledger would not prejudice the appellant currently. However, if funds flow into the ledger, the blocking would be restricted to a specific sum. The appellant was reminded of the obligation to provide proper evidence to establish the movement of goods, both in terms of purchases and sales. Finally, no costs were awarded in this matter.