2024 (9) TMI 1460 - HC - GST

High Court Quashes Administrative Order for Procedural Irregularities, Mandates Fresh Hearing and Transparent Decision-Making Process

M/s. Paramount Shipping Services Pvt. Ltd. Versus Assistant Commissioner (ST)

HC found the impugned order lacking due process, setting aside the order dated 30.04.2024 on grounds of jurisdictional defect and non-application of mind. ... Violation of principles of natural justice - lack of jurisdiction - non application of mind - Reverse Charge Mechanism (RCM) liability issue - HELD THAT:- The petitioner replied on the RCM liability issue by stating that the amounts declared and paid under RCM are greater than the amount mentioned in the notice. The observation of the proper officer on this issue reflects complete non application of mind. Likewise, as regards trade payables, the petitioner replied stating that all trade payables are below 180 days. Once again, without applying his mind to the reply, an identical finding is recorded. Since the impugned order is vitiated by complete non application of mind and non consideration of the petitioner's reply, such order is liable to be set aside. The impugned order dated 30.04.2024 is set aside and the matter is remanded for reconsideration - Petition disposed off by way of remand. Issues: Challenge of order on lack of jurisdiction and non-application of mindThe judgment involves a challenge to an order dated 30.04.2024 based on lack of jurisdiction and non-application of mind. The petitioner submitted a reply to a show cause notice dated 29.12.2023, addressing each defect mentioned. The petitioner contended that the respondent lacked authority to issue the impugned order and that the reply was not duly considered, specifically mentioning issues related to Reverse Charge Mechanism (RCM) liability and trade payables.Analysis: Lack of Jurisdiction and Non-Application of MindThe petitioner argued that the respondent did not have the authority to proceed further after dropping the initial show cause notice. Additionally, the petitioner claimed that the reply submitted on 23.01.2024 was not adequately considered, as the impugned order mechanically repeated observations without proper evaluation. Specifically, concerns were raised regarding the RCM liability issue and trade payables, highlighting discrepancies between the petitioner's submissions and the officer's observations.Principles of Natural Justice and Consideration of ReplyThe Additional Government Pleader contended that principles of natural justice were followed, and the petitioner's reply was taken into account before issuing the impugned order. However, upon examining the impugned order, it was noted that the observations made by the proper officer on various issues were identical, indicating a lack of individual consideration for each matter addressed in the petitioner's reply.Detailed Examination of Reply and Officer's ObservationsThe judgment provided excerpts from the petitioner's reply regarding RCM liability and trade payables, emphasizing discrepancies between the petitioner's explanations and the officer's conclusions. The officer's observations highlighted the absence of proper documentary evidence to substantiate the petitioner's claims, leading to a confirmation of the proposal without adequate consideration of the provided information.Setting Aside the Impugned Order and Remand for ReconsiderationDue to the evident lack of application of mind and non-consideration of the petitioner's reply in the impugned order, the court set aside the order dated 30.04.2024 and remanded the matter for reconsideration. The respondent was directed to issue a fresh order within three months, providing the petitioner with a reasonable opportunity, including a personal hearing. The judgment concluded by disposing of the writ petition without costs and closing connected miscellaneous petitions.