2024 (9) TMI 48 - HC - GST

Tax Challenge Upheld: Natural Justice Prevails, Order Remanded with 10% Payment and Fresh Hearing Opportunity

HC allowed writ petitions challenging tax orders. Court found principles of natural justice violated due to lack of personal hearing. Ordered remand with ... Violation of principles of natural justice - Opportunity of personal hearing not provided - Calling for the records relating to the orders passed by the Respondent - discrepancies in Input Tax Credits in respect of the assessment years 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23 - HELD THAT:- It is evident that it is not the case of the Petitioner that the show cause notices uploaded in the Portal were not noticed by the Petitioner. It is also the case of the Petitioner that to the show cause notices issued through Portal, replies were sent to the Respondent. But, again when the Respondent issued reminder notices, dated 11.01.2024, calling for the Petitioner to file additional replies on or before 19.01.2024 and fixing the date of personal hearing on 18.01.2024, it is the case of the Petitioner that the Petitioner sought for time of two weeks for filing additional replies by replies dated 18.01.2024 - it is evident that the impugned orders were passed on 29.01.2024 even before the expiry of the two weeks as sought for by the Petitioner on 01.02.2024. It is settled law that if an Assessing Officer intends to confirm a show cause notice after filing of a reply by way of an assessment order, it is the bounden duty of the Assessing Officer to provide an opportunity of personal hearing before passing an assessment order, but, in the present cases, it is lacking. Hence, this Court is of the view that the impugned orders came to be passed, without affording opportunity of a personal hearing to the Petitioner to establish their case, thereby violating the principles of natural justice. The matters in all these Writ Petitions are remanded back to the Respondent for consideration afresh, by setting aside the impugned orders in all these Writ Petitions on condition that the Petitioner shall pay 10% of the disputed tax demand, for each of the assessment years, within a period of six weeks from the date of receipt of a copy of this order - Petition allowed by way of remand. Issues:- Issuance of Writ of Certiorari to call for records relating to orders in GSTIN for multiple years- Allegation of lack of opportunity of personal hearing and violation of principles of natural justice- Request for remand of the matters to the Respondent for fresh consideration with conditionsAnalysis:The Writ Petitions were filed seeking a Writ of Certiorari to call for records related to orders in GSTIN for various assessment years. The Petitioner, a Proprietorship Firm, alleged discrepancies in Input Tax Credits and received show cause notices for the years in question. Despite filing replies and seeking additional time, the impugned orders were passed confirming the show cause notices. Subsequently, rectification petitions were rejected, leading to the filing of these Writ Petitions. The Petitioner contended that the impugned orders were passed without sufficient opportunity of personal hearing, violating principles of natural justice.During the proceedings, the Petitioner argued that the impugned orders were issued prematurely, before the requested time for filing additional replies had elapsed, depriving them of a fair chance to present their case. On the other hand, the Government Advocate for the Respondent claimed that the Petitioner had been given adequate opportunities and that the lack of personal hearing could be rectified by setting aside the impugned orders with certain conditions imposed on the Petitioner.Upon examination, the Court found that the impugned orders were indeed passed without affording the Petitioner a proper opportunity of personal hearing, contravening the principles of natural justice. Consequently, the Court remanded the matters back to the Respondent for fresh consideration. The Court directed the Petitioner to pay 10% of the disputed tax demand for each assessment year within six weeks and submit additional replies with relevant documents within two weeks thereafter. The Respondent was instructed to issue separate notices of personal hearing, allowing at least 14 days for preparation, and to pass fresh orders within eight weeks from the receipt of the Petitioner's replies.Furthermore, the Court ordered the Respondent to lift any bank attachment on the Petitioner's account if sufficient funds were available to comply with the conditional order. The Writ Petitions were allowed with the specified directions and terms, with no costs imposed, and the connected matters were closed.