2024 (7) TMI 362 - HC - GST

Order Overturned: Case Remanded for Reconsideration Due to Breach of Natural Justice; Dealer to Pay 10% Tax for Show Cause.

The HC set aside the impugned order dated 28.12.2023, citing breach of natural justice, and remanded the matter for reconsideration. The petitioner, a ... Breach of natural justice - setting aside administrative order for non hearing - remand for fresh consideration - conditional remand on deposit of a proportion of disputed tax - opportunity of personal hearing and to submit reply - reconsideration on merits after complianceBreach of natural justice - setting aside administrative order for non hearing - Impugned order quashed on the ground that the petitioner was not heard before its issuance. - HELD THAT: - The Court found that the petitioner did not participate in the proceedings that culminated in the impugned order and was not heard prior to passing of that order. Although the respondent contends that multiple opportunities were afforded, the factual position disclosed non participation by the petitioner; the Court treated this as a breach of the principles of natural justice warranting interference. The Court therefore set aside the impugned order to enable adjudication on merits after affording the petitioner an opportunity to be heard. [Paras 5, 6]Impugned order dated 28.12.2023 set aside for want of hearing and remanded for fresh consideration.Remand for fresh consideration - conditional remand on deposit of a proportion of disputed tax - opportunity of personal hearing and to submit reply - reconsideration on merits after compliance - Matter remanded to respondent on terms and directions for reconsideration and fresh decision. - HELD THAT: - Instead of deciding the tax demand itself, the Court directed a limited course: the petitioner is permitted to submit a reply to the show cause notice and shall remit 10% of the disputed tax demand within two months of receipt of this order. Upon receipt of the petitioner's reply and satisfaction of the remittance condition, the respondent is directed to afford the petitioner an opportunity including a personal hearing, and thereafter to pass a fresh order within two months from receipt of the reply. The Court recorded that the petitioner's earlier non participation was attributable to negligence but nonetheless provided the remedial opportunity on terms. [Paras 6]Remanded to respondent for reconsideration on merits subject to the petitioner remitting 10% of the disputed tax within two months and being afforded opportunity to file reply and a personal hearing; fresh order to follow within two months of receipt of the reply.Final Conclusion: The petition is allowed by setting aside the impugned order dated 28.12.2023 and remanding the matter to the respondent for reconsideration on the stated conditions; W.P.No.9060 of 2024 disposed of with no order as to costs. Issues: Challenge on grounds of breach of natural justice in an order dated 28.12.2023.In this case, the petitioner, a dealer of marbles, granites, and related materials, challenged an order issued on 28.12.2023, alleging a breach of natural justice. The petitioner received an audit report on 23.09.2023, followed by a show cause notice on 27.09.2023, which the petitioner did not respond to, claiming that their appointed auditor failed to inform them about the proceedings. The impugned order was issued without hearing the petitioner. The petitioner, through their counsel, requested an opportunity to be heard and agreed to remit 10% of the disputed tax demand as a condition for remand.The Additional Government Pleader representing the respondent argued that the petitioner had multiple opportunities to respond to the audit observations and show cause notice. The court found that the petitioner's non-participation in the proceedings leading to the impugned order was due to negligence in responding to notices. Since the petitioner did not contest the tax demand on its merits, the court deemed it appropriate to provide the petitioner with an opportunity to do so by imposing certain conditions.As a result, the court set aside the impugned order dated 28.12.2023 and remanded the matter to the respondent for reconsideration. The petitioner was directed to remit 10% of the disputed tax demand within two months and submit a reply to the show cause notice within the same period. Upon receipt of the petitioner's reply and satisfaction of the remittance condition, the respondent was instructed to provide the petitioner with an opportunity, including a personal hearing, and issue a fresh order within two months.The court disposed of the case with the mentioned terms, with no order as to costs, and closed the connected miscellaneous petitions.