2026 (3) TMI 402 - HC - GST

Procedural Fairness requires a fresh hearing and reconsideration of a GST show cause notice; authority to pass fresh order.

Petitioner challenged GST recovery proceedings initiated after the alleged taxpayer's death and sought procedural protections; the court applied the ... Failure to consider material submissions - breach of principles of natural justice - fresh hearing and reconsideration of show cause notice - HELD THAT:- Failure to consider material submissions - Whether the impugned order was passed without affording a proper hearing and without considering the Petitioner's replies, requiring fresh consideration of the show cause notice. - HELD THAT: - The Court found that the show cause notice was issued after the death of the Petitioner's father and that the Petitioner had filed a detailed reply which was not taken into account in the impugned order. In view of these factual circumstances and the Petitioner's contention that he was confronted with a recovery allegedly relating to his deceased father, the Court concluded that the Petitioner must be afforded another opportunity to be heard on all contentions. The Court directed that, if the Petitioner requires documents relevant to the show cause notice, those documents shall be furnished on a specific application. Thereafter the authority is to pass a fresh order on the show cause notice after hearing the Petitioner and considering his submissions. [Paras 3, 4, 6, 7] The Deputy Commissioner, Division-III, CGST & Central Excise Mumbai West Commissionerate, is directed to grant the Petitioner a fresh hearing, furnish requested documents on specific application, and after hearing pass a fresh order on the show cause notice within four weeks from the conclusion of the hearing; initial appearance fixed as directed by the Court. Final Conclusion: The petition is disposed of by directing a fresh hearing and reconsideration of the show cause notice; all challenges to the statutory provisions are left open for determination by the authority or appropriate forum; no costs. Issues: (i) Whether the petitioner, facing tax recovery proceedings alleged to pertain to his deceased father, is entitled to a fresh opportunity of hearing and reconsideration of the show cause notice and impugned orders.Analysis: The petitioner received show cause proceedings and an order after the alleged taxpayer's death and contends entitlement to procedural safeguards, including reasons and consideration of his detailed reply. The challenge to applicability or vires of Section 93(1) and Section 74 of the Central Goods and Services Act, 2017 was raised but not adjudicated on merits. Given the factual circumstance of post-death initiation and the asserted absence of recorded reasons and consideration of petitioner's reply, a remedial measure limited to granting an opportunity to be heard and to obtain documents is an available procedural remedy. The analysis focuses on procedural fairness and the need for fresh adjudication on the show cause notice, while leaving substantive questions on the statutory provisions open for determination by the authority after hearing.Conclusion: The petitioner is entitled to a fresh opportunity of hearing before the competent GST authority; on conclusion of that hearing the authority shall pass a fresh order in accordance with law within the directed time frame. The substantive challenges to Sections 93(1) and 74 of the Central Goods and Services Act, 2017 remain open for consideration by the authority and are not decided in this order.