2019 (2) TMI 1929 - HC - GST

Principles of natural justice - levy of GST as well as penalty - grievances of the writ petitioner is that he has not received any show- cause notice or an opportunity was provided, enabling him to defend his case - HELD THAT - This Court is of an opinion that the writ petition is fit for remand and accordingly, the impugned order passed by the second respondent in memo dated 22.10.2018 is quashed. The respondents are directed to issue show cause notice, setting out all the details to the writ petitioner, within a period of four weeks from the date of receipt of a copy of this order. On receipt of the show cause notice from the respondents, the writ petitioner is directed to submit their explanations/objections, along with the documents, if any, within a period of two weeks from the date of receipt of the show cause notice and thereafter, the authorities competent shall consider the materials available on record as well as the explanations/objections submitted by the writ petitioner, take a decision and pass orders on merits and in accordance with law, within a period of eight weeks thereafter. Petition allowed in part.

Summary

Issues:
Challenge against penalty and GST imposition without proper procedure followed.

Analysis:
The writ petitioner, a Salesmen/Supervisor, challenged a memo imposing penalty and GST without proper procedure. The Corporation's Code of Prevention and Detection of Fraudulent Acts was not notified to employees, leading to lack of understanding of procedures. Circulars regarding MRP violations were also not circulated. The petitioner claimed no show-cause notice or opportunity to defend was provided before the penalty was imposed. The impugned order was passed unilaterally without any enquiry or notice to the petitioner.

The third respondent justified the actions citing violation of MRP as an offence under the Legal Metrology Act. A show-cause notice was issued to the petitioner after a surprise check found MRP violations. The petitioner was transferred pending proceedings, and fines were advised to be paid. However, the Court emphasized the necessity of providing an opportunity for the delinquent official to defend their case, as per statutory procedures.

The Court held that for imposing penalties or minor punishments, authorities must issue show-cause notices and consider explanations before making decisions. It was noted that no show-cause notice was issued to the petitioner in this case. The respondents failed to prove that the petitioner was provided with an opportunity before the penalty was imposed.

Consequently, the Court quashed the impugned order and directed the respondents to issue a show-cause notice to the petitioner within four weeks. The petitioner was instructed to submit explanations within two weeks of receiving the notice. The competent authorities were directed to consider the materials and explanations submitted, make a decision, and pass orders within eight weeks. The Court clarified the procedures for imposing minor and major penalties, emphasizing adherence to Model Standing Orders.

In conclusion, the writ petition was partly allowed with the mentioned directions, and no costs were imposed. The connected miscellaneous petitions were closed as a result.