TaxTMI 
TaxTMI 
2024 (11) TMI 1166
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....me on purchase of glycerin, fatty acid and finishing chemical made up of perfumery compound. It was further found that the petitioner had also not produced proper evidence with regard to cancelling 115 e-way bills by it during the financial year 2021-22. Subsequently, a show cause notice dated March 20, 2024 was issued to the petitioner by the Deputy Commissioner, State Goods and Services Tax Sector- 17, Kanpur/respondent No.3 asking it to refund the excess utilization of ITC along with penalty amounting to Rs. 2,24,24,710/- by April 19, 2024. b. In response to the aforesaid show cause notice, the petitioner filed its reply on April 18, 2024 wherein it denied the allegations made against it mentioning that the show cause notice was not supported with any evidence or material. c. On June 4, 2024, another show cause notice under Section 74 of the Act was issued to the petitioner by which the amount of Tax and penalty was revised to Rs. 2,43,74,686/-. d. In response to the notice dated June 4, 2024, the petitioner again filed its reply supported with an affidavit wherein it again denied the allegation that the glycerin, fatty acid and perfumery compound are not used in its busin....
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....327;या है और न ही जांच रिपोर्ट दी गयी है। यह भी उल्लेख किया गया है कि ई-वे बिल को अभिखण्डित करने का कोई साक्ष्य न तो नोटिस में संदर्भित है और न ही प्रदत्त किया गया है तथा न्यायहित में सम्पूर्ण जांच के अभिलेखों के नि&....
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....रक स्पष्टीकरण दाखिल किया गया। ज्ञातव्य है कि केवल 02 बिन्दओं पर करदेयता निर्धारित किये जाने का नोटिस में उल्लेख किया गया है। पूर्व में दाखिल स्पष्टीकरण में 28 बिन्दुओं का जवाब दाखिल किया गया है जिसमें बिन्द....
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....; करते हुए निम्न प्रकार करदेयता, ब्याज व अर्थदण्ड आरोपित किया जाता है:- 1- यह कि करदाता द्वारा ग्लिसरीन, फैटी एसिड एवं परफ्यूमरी कंपाउंड से बने फिनिशिंग कैमिकल / एस०एम०पी० लिक्विड (एच०एस०एन०-3809) की खरीद प्रदर्शि&....
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....#2366;ना अपेक्षित है।" (Below is the English translation of the above Hindi portion) On perusal of the said filed explanation, it is found that in the point Nos.9, 11 & 23 of the filed explanation, it has been mentioned that the desired details of the so called facts have not been given with respect to the Show Cause Notice regarding the charges, nor has been the inquiry report provided. It has also been mentioned that neither there is any reference of any evidence in the notice regarding the quashing of the e-way bill nor has it been provided and it is mentioned to provide time, in the interest of justice, for inspection and examination of records of the entire inquiry. Therefore, in relation to the above, by issuing notice to the taxpayer for inspection and examination of the records on 06-09-2024 by reference No.ZD090824054924X dated 07-08- 2024, it was expected that the taxpayer should appear and observe the point in question and submit explanation based on facts. In relation to the above, no one appeared for inspection of the file nor any factual explanation was submitted. It is to be noted th....
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....ring was given by the respondents to the petitioner to explain its reply in detail. 6. The explanation given by the petitioner in the affidavit annexing certificates of three experts has not been considered at all by the respondents and no reasons have been provided as to why the same are to be rejected. Once such an explanation has been provided, it was incumbent upon the respondents to have tested the fabrics to come to a conclusion that three raw materials were not used in the manufacture of fabrics. Without having done so and without granting an opportunity of fair hearing to the petitioner, fastening of such liability upon the petitioner is arbitrary and illegal and cannot be countenanced by this Court. 7. Counsel on behalf of the respondents has supported the show cause notice and the findings in the impugned order by submitting that the petitioner was not able to provide explanation on all points, and therefore, the order under Section 74 of the Act fastens liability on the points that were not answered by the petitioner. However, he had no explanation as to why the fabrics were not examined to check whether the petitioner had used the raw materials in the manufacture of t....
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....case." 3. One of the rules which constitutes a part of the principles of natural justice is the rule of audi alteram partem which requires that no man should be condemned unheard. It is indeed a requirement of the duty to act fairly which lies on all quasi-judicial authorities and this duty has been extended also to the authorities holding administrative enquiries involving civil consequences or affecting rights of parties because as pointed out by this Court in A.K. Kraipak v. Union of India [(1969) 2 SCC 262 : (1970) 1 SCR 457] "the aim of the rules of natural justice is to secure justice or to put it negatively, to prevent miscarriage of justice" and justice, in a society which has accepted socialism as its article of faith in the Constitution is dispensed not only by judicial or quasi-judicial authorities but also by authorities discharging administrative functions. This rule which requires an opportunity to be heard to be given to a person likely to be affected by a decision is also, like the genus of which it is a species, not an inflexible rule having a fixed connotation. It has a variable content depending on the nature of the inquiry, the framework of the law under which....
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.... information, which sources he may not disclose to the assessee at all; and (4) in case he proposes to use against the assessee the result of any private inquiries made by him, he must communicate to the assessee the substance of the information so proposed to be utilised to such an extent as to put the assessee in possession of full particulars of the case he is expected to meet and should further give him ample opportunity to meet it, if possible." It will thus be noticed that this Court clearly laid down that while the Income-tax Officer was not debarred from relying on any material against the assessee, justice and fair-play demanded that the sources of information relied upon by the Income-tax Officer must be disclosed to the assessee so that he is in a position to rebut the same and an opportunity should be given to the assessee to meet the effect the aforesaid information." 10. The Apex Court in Mrs. Maneka Gandhi v. Union of India and another reported in (1978) 1 SCC 248 laid down the ratio in relation to the principles of audi alteram partem in the doctrine of natural justice. The relevant paragraph is delineated below: "14. .....But at the same time it must be rememb....
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....stice is not a rule of thumb or a strait-jacket formula as an abstract proposition of law. It depends on the facts of the case, nature of the inquiry and the effect of the order/decision on the rights of the persons and attendants circumstances. ...." 12. The Supreme Court in A.S. Motors Private Limited v. Union of India and Others reported in (2013) 10 SCC 114 held as under : "8. Rules of natural justice, it is by now fairly well settled, are not rigid, immutable or embodied rules that may be capable of being put in straitjacket nor have the same been so evolved as to apply universally to all kind of domestic tribunals and enquiries. What the Courts in essence look for in every case where violation of the principles of natural justice is alleged is whether the affected party was given reasonable opportunity to present its case and whether the administrative authority had acted fairly, impartially and reasonably. The doctrine of audi alteram partem is thus aimed at striking at arbitrariness and want of fair play. Judicial pronouncements on the subject have, therefore, recognised that the demands of natural justice may be different in different situations depending upon not only ....
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....33]. Secondly, natural justice principles breathe reasonableness into the procedure. Responding to the argument that the principles of natural justice are not static but are capable of being moulded to the circumstances, it was held that the core of natural justice guarantees a reasonable procedure which is a constitutional requirement entrenched in Articles 14, 19 and 21. The facet of audi alterum partem encompasses the components of notice, contents of the notice, reports of inquiry, and materials that are available for perusal. While situational modifications are permissible, the rules of natural justice cannot be modified to suit the needs of the situation to such an extent that the core of the principle is abrogated because it is the core that infuses procedural reasonableness. The burden is on the applicant to prove that the procedure that was followed (or not followed) by the adjudicating authority, in effect, infringes upon the core of the right to a fair and reasonable hearing." 14. The judgement of the Supreme Court in State Bank of India and others v. Rajesh Agarwal and others reported in (2023) 6 SCC 1 further expanded the said principles, extract of which is provided ....
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....e used in administrative procedure. Although an authority can rely upon materials familiar to it in its expert capacity without the need formally to introduce them in evidence, nevertheless, the parties ought to be informed of materials so noticed and be given an opportunity to explain or rebut them. The data on which an authority is acting must be apprised to the party against whom the data is to be used as such a party would then have an opportunity not only to refute it but also supplement, explain or give a different perspective to the facts upon which the authority relies. This has been explained by Schwartz in his work on Administrative Law. The aforesaid doctrine applies with greater force to a judicial / adjudicatory body. Therefore, applying the aforesaid principle to the cases that come up before the NGT, if the NGT intends to rely upon an expert Committee report or any other relevant material that comes to its knowledge, it should disclose in advance to the party so as to give an opportunity for discussion and rebuttal. Thus, factual information which comes to the knowledge of NGT on the basis of the report of the Committee constituted by it, if to be relied upon by th....
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....tion two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair-play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is "nemo judex in causa sua" or "nemo debet esse judex in propria causa sua" that is no man shall be a judge in his own cause. The second rule is "audi alteram partem", that is, "hear the other side". A corollary has been deduced from the above two rules and particularly the audi alteram partem rule, i. e., "he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right" or in other words, as it is now expressed, "justice should not only be done but should manifestly be seen to be done". Natural justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to be ranked as fundamental. The purpose of following the principles of natural justice is the prevention of miscarriage of jus....
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....iability upon him; b) the above principles of audi alteram partem act as a safeguard against arbitrary decision making and provide for a crucial foundation for just equitable, legal and administrative proceedings; c) decisions by a judicial authority should only be made after consideration and proper deliberation of all relevant contentions raised by the assessee and failure to do so would amount to decision making that is arbitrary and illegal in law; d) documents that are relied upon by the department are necessarily required to be provided to a person upon whom a liability is being fastened so that, the person can deny and/or dispute the said documents. Non production of these documents to the assessee would amount to violation of the principles of natural justice unless the authority can show that the documents were not necessary and did not form part of the order passed wherein the liability was fastened on the assessee. e) rules of natural justice, it is by now fairly well settled, are not rigid, immutable or embodied rules that may be capable of being put in straitjacket nor have the same been so evolved as to apply universally to all kind of domestic tribunals and e....