2024 (5) TMI 919 - HC - GST

Tax Authorities Ordered to Reconsider Exemption Claim After Procedural Errors, Ensuring Fair Review of All Submitted Evidence

ABG Construction Versus Assistant Commissioner, CGST & Central Excise, Bolpur Commissionerate & Ors.

HC found a procedural violation by tax authorities who failed to properly consider the appellant's documents for tax exemption. The court directed a ... Violation of principles of natural justice - non-application of mind - learned Judge failed to take into consideration the fact that relevant documents submitted by the appellant had not been considered by the Principal Commissioner, CGST, Bolpur Commissionerate - HELD THAT:- The finding of adjudicating authority clearly demonstrates non-application of mind by the adjudicating authority to the documents submitted by the appellant claiming exemption with regard to the services which were the subject matter of adjudication. This amounts to a manifest error apparent on the face of the records which has rendered the decision making amenable to judicial review. Existence of alternative remedy is a self-imposed restriction and does not divest a Court of its extraordinary powers under Articles 226 of the Constitution of India. As the documents submitted by the appellant assessee had not been considered, he submits in the event the assessee deposits 7.5% of the tax assessed in the impugned order, the order may remain suspended and the matter be remanded for fresh reconsideration in light of the documents furnished by the assessee. There is a manifest error on record which has affected the fairness of the decision making process. It is directed that in the event appellant/assessee deposits 7.5% of the tax assessed in the impugned order within four weeks from date, impugned order shall remain suspended and the matter shall be remanded to the adjudicating authority who shall decide the matter afresh in accordance with law in light of the documents submitted before the authority after giving opportunity of hearing to the appellant. Appeal disposed off. Issues involved: Failure to consider relevant documents by the Principal Commissioner, CGST, Bolpur Commissionerate leading to a violation of principles of natural justice.Judgment Summary:Issue 1: Failure to Consider Relevant DocumentsThe appellant contended that the learned Judge failed to consider the relevant documents submitted, which were crucial for claiming exemption under Mega exemption Notification No. 25 of 2012. The Single Judge opined that the appellant had been given adequate opportunity and there was no violation of natural justice principles. However, upon reviewing the annexures to the stay application, it was noted that the adjudicating authority had not properly considered the documents submitted by the appellant. The authority incorrectly held that certain services were taxable despite the appellant submitting relevant documents supporting their claim for exemption. This non-application of mind by the authority constituted a manifest error amenable to judicial review. The Court held that the existence of an alternative remedy does not restrict its powers under Article 226 of the Constitution of India to correct such errors.Issue 2: Remand for Fresh ConsiderationThe Court directed that if the appellant deposits 7.5% of the tax assessed within four weeks, the impugned order would be suspended. The matter would then be remanded to the adjudicating authority for a fresh consideration in light of all the documents submitted by the appellant. The authority was instructed to pass a reasoned order within four months from the date of deposit, giving the appellant an opportunity to present reconciliation statements and additional documents supporting their plea for exemption. Failure to deposit the required amount within the stipulated time would result in the revival of the impugned order.ConclusionThe Court disposed of the appeal and connected application with the aforementioned directions, emphasizing the importance of considering all relevant documents before making a decision. No costs were awarded in this matter.