2024 (6) TMI 1084 - HC - GST

GST Tax Dispute: Procedural Fairness Prevails with Conditional Deposit and Mandatory Fresh Hearing for Petitioner

HC addressed a GST tax dispute involving procedural fairness. The court set aside the original order and remanded the case, requiring the petitioner to ... Violation of principles of natural justice - denial of a personal hearing - order were uploaded on the GST portal and not communicated to the petitioner through any of the other modes prescribed in Section 169 of applicable GST enactments - HELD THAT:- As a registered person under applicable GST enactments, the petitioner was under an obligation to monitor the GST portal on an ongoing basis. Therefore, the explanation provided by the petitioner is wholly not satisfactory. At the same time, on perusal of the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice or participate in proceedings. In these circumstances, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The matter is remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order - petition disposed off by way of remand. Issues: Denial of personal hearing, Communication of noticesDenial of Personal Hearing:The judgment primarily deals with the challenge to an order dated 20.11.2023 on the grounds of denial of a personal hearing. The petitioner claimed unawareness of the proceedings leading to the impugned order as the notice and order were uploaded on the GST portal without communication through other prescribed modes. The petitioner, through counsel, highlighted that the alleged date of personal hearing was missing in the reference column and the body of the order. It was also mentioned that the petitioner agreed to remit 10% of the disputed tax demand for remand. On the other hand, the Government Advocate pointed out that prior to the impugned order, notices were issued, including a show cause notice and multiple personal hearing notices. The court noted that as a registered person under GST enactments, the petitioner had an obligation to monitor the GST portal regularly. However, it was observed that the tax proposal was confirmed due to the petitioner's non-response to the show cause notice or participation in the proceedings. Therefore, the court concluded that justice demanded providing the petitioner an opportunity to contest the tax demand on merits, subject to certain conditions.Communication of Notices:The judgment emphasized the importance of communication of notices in legal proceedings. It was noted that the petitioner's argument of not receiving communication through prescribed modes other than the GST portal was not considered satisfactory. The court highlighted that the petitioner, being a registered person under GST enactments, was obligated to monitor the portal continuously. Despite this, the court acknowledged the need for ensuring that the petitioner had a fair opportunity to contest the tax demand. Consequently, the impugned order dated 20.11.2023 was set aside, and the matter was remanded for reconsideration with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The petitioner was granted the opportunity to submit a reply to the show cause notice and relevant documents. The respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months from receiving the petitioner's reply.In conclusion, the writ petition was disposed of without costs, and connected miscellaneous petitions were closed, ensuring that the petitioner received a fair chance to contest the tax demand while upholding principles of natural justice and procedural fairness.