Petitioner's natural justice claim rejected but order quashed for inadequate consideration of reply under Section 65

Madras HC held that petitioner's claim of violation of natural justice principles under Section 65 of GST Acts was unfounded, as petitioner had participated in proceedings and filed detailed replies to the 146-page show cause notice. However, the court quashed the impugned order finding that respondent failed to consider petitioner's reply adequately. Matter remitted for fresh consideration with direction to deposit 10% of disputed tax amount Rs. 11,59,31,746/- before 30.05.2024. Petition disposed.

---

---

Issues involved:
The judgment involves a challenge to an order passed by the respondent for the Assessment Year 2017-2018, primarily based on alleged violations of conditions in Section 65 of the respective GST Acts and the principles of natural justice.

Violation of Section 65 of GST Acts:
The petitioner contested the impugned order on grounds of violation of Section 65 of the GST Acts, citing issues with the authorization of the Audit conducted at their premises and lack of prior intimation as required by the Act. The petitioner also highlighted non-compliance with the provision for providing the Audit Report within 30 days, leading to a lack of opportunity to respond effectively to the Show Cause Notice.

Principles of Natural Justice:
The petitioner argued that the Show Cause Notice issued was merely a summary and not a detailed copy, impairing their ability to respond adequately. The dispute arose from discrepancies in returns filed by the petitioner and their suppliers, further emphasizing a violation of natural justice principles due to the lack of detailed information provided.

Respondent's Defense:
The Government Advocate for the respondent refuted the petitioner's claims, providing a detailed sequence of events leading up to the assessment order. They asserted that the petitioner had been duly informed and involved in the audit and subsequent proceedings, with multiple opportunities given for responses and hearings.

Judgment and Decision:
After considering both parties' submissions, the Court found that while the petitioner had actively participated in the proceedings, their detailed replies had not been adequately considered in the impugned order. As a result, the order was quashed, and the case remitted back to the respondent for a fresh decision. The petitioner was directed to deposit 10% of the disputed tax amount before a specified date. The impugned order was treated as a corrigendum to the Show Cause Notice, allowing the petitioner to file a reply within a given timeframe. The respondent was instructed to pass a fresh order within 30 days after the deposit, ensuring the petitioner's right to be heard. Failure to comply with the deposit requirement would result in the dismissal of the writ petition and affirmation of the impugned order, allowing for recovery proceedings. Pending the deposit, recovery proceedings were to be halted.

Conclusion:
The Court disposed of the Writ Petition without costs, setting clear directives for the parties involved and establishing a timeline for the resolution of the matter.

---