2020 (8) TMI 414 - HC - GST

Levy of penalty u/s 129 (3) of the Central Goods and Services Act, 2017 - Principles of natural justice - sufficient and reasonable opportunity of being heard not provided to the petitioner - HELD THAT - Without going into the legal and factual aspects of the matter, it can be seen from the impugned order at Annexure-E that several documents and circumstances which were neither referred to nor enumerated in the show cause notice at Annexure-B4 have been relied upon by the respondent No.1 in the impugned order. It is not in dispute that no opportunity of personal hearing was given to the petitioner before passing the impugned order - The material on record also indicates that several documents relied upon by the respondent No.1 in the impugned order at Annexure-E were neither brought to the notice of the petitioner nor was he permitted to cross-examine the witnesses with reference to the said documents. In the absence of sufficient and reasonable opportunity being granted in favour of the petitioner, the impugned order is clearly in contravention of principles of natural justice and that the same deserves to be set aside on this ground - matter deserves to be remitted back to the respondent No.1 to consider and dispose off the same afresh in accordance with law - Petition allowed by way of remand.

Summary

Issues:
Challenge to penalty order under Section 129(3) of the Central Goods and Services Act, 2017 on grounds of violation of principles of natural justice.

Analysis:
The petitioner sought the quashing of the penalty order under Section 129(3) of the Act, alleging violations of natural justice principles. The petitioner argued that the impugned order was based on documents not previously brought to their notice, without affording a personal hearing or providing a reasonable opportunity to respond. The respondent, on the other hand, contended that the petition lacked merit and highlighted the availability of appeal as a remedy. Upon review, the court observed that the impugned order relied on undisclosed documents and circumstances, without granting the petitioner a personal hearing or the chance to cross-examine witnesses. The court found these actions to be in violation of natural justice principles, leading to the quashing of the order.

The court emphasized the importance of providing sufficient and reasonable opportunities to the petitioner, noting that the lack of such opportunities rendered the impugned order invalid. Consequently, the court set aside the order and remitted the matter back to the Assistant Commissioner for fresh disposal in accordance with the law. The court directed the respondent to provide all relied-upon documents to the petitioner, allow cross-examination of witnesses, and permit the submission of additional documents. Additionally, in light of the Covid-19 pandemic, the court ordered that proceedings could be conducted online via video conferencing at the petitioner's cost. To expedite the process due to perishable goods involved, the court directed the respondent to conclude the proceedings within one month. The court kept all contentions open for further consideration.