2021 (1) TMI 58 - HC - GST

Principles of Natural Justice - validity of assessment order - assessment order challenged on the ground that no sufficient opportunity was granted by the respondent to the petitioner before passing of the impugned assessment orders and the principles of natural justice has been violated - HELD THAT - Admittedly, the show cause notices were issued on 03.08.2020 and the impugned assessment orders have been issued on 31.10.2020, within a short period of three months. When the petitioner has been seeking for sufficient time for sending a detailed reply and that too when he has sought for documents, which was furnished only on 20.10.2020, the respondent ought to have given some more time to the petitioner to place all his objections with regard to the demand made by the respondent as per the show cause notices, dated 03.08.2020. However, as seen from the impugned assessment orders, sufficient time has not been granted to the petitioner to raise all objections available to them under law. When it is the categorical stand of the petitioner that they are not liable to pay the demand as claimed by the respondent, the respondent ought to have given sufficient opportunity to the petitioner to raise all objections. However, the respondent has not done so, while passing the impugned assessment orders. However, this Court considering the huge amount of taxes payable as seen from the impugned assessment orders, this Court will have to put the petitioner on terms, before the impugned orders are quashed and remanded back to the respondent for fresh consideration on merits and in accordance with law - this court is of the considered view that the petitioner will have to pay a sum of ₹ 3,00,000/- in respect of each of the impugned assessment order on or before 05.01.2021 and on such payment, the impugned assessment orders shall stand quashed. The matter remanded back to the respondent for fresh consideration and the respondent shall pass final orders on merits and in accordance with law, after giving adequate opportunity to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment orders for assessment years 2017-18, 2018-19 & 2019-20 on grounds of lack of opportunity and violation of natural justice.

Analysis:
The petitioner challenged the assessment orders, alleging that the respondent did not provide sufficient opportunity before passing the orders, thus violating the principles of natural justice. Due to the pandemic, the petitioner requested time to reply to the show cause notice issued in August 2020. The petitioner argued that despite the delayed provision of requested documents and objections raised, the assessment orders were hastily passed without waiting for a detailed reply. The petitioner contended that the documents submitted were genuine, refuting the respondent's claim of fake invoices. The petitioner emphasized the lack of personal hearing and arbitrary passing of orders.

The petitioner's counsel highlighted the timeline of events, including the issuance of show cause notices, requests for documents, and the delayed submission of replies. The petitioner maintained that the assessment orders were passed in haste, disregarding their objections and without proper consideration of the replies provided. The petitioner's detailed response reiterated the authenticity of the documents and refuted the allegations of fake invoices. The counsel argued that the respondent's actions lacked procedural fairness, especially during the pandemic.

In response, the Special Government Pleader asserted that the petitioner was granted sufficient opportunity and a chance for a personal hearing, which the petitioner opted not to attend. The respondent contended that there was no violation of natural justice on their part. The Court examined the records and assessment orders, noting the issuance of show cause notices, the submission of documents, and the subsequent passing of assessment orders within a short period.

The Court observed that the petitioner had requested time to provide a detailed reply and raise objections, especially after receiving the requested documents. It noted the discrepancy between the date of the petitioner's reply and the passing of assessment orders, indicating a lack of adequate consideration of the petitioner's submissions. Despite the petitioner's assertion of no liability for the tax demand, the Court acknowledged the significant tax amount involved. Consequently, the Court imposed a conditional payment requirement on the petitioner before quashing the assessment orders and remanding the matter back to the respondent for fresh consideration.

The Court directed the petitioner to pay a specified amount for each assessment order by a set deadline, upon which the assessment orders would be quashed, and the matter remanded for further consideration. Failure to make the payment would result in the dismissal of the writ petitions. The Court emphasized the importance of procedural fairness and granted a timeframe for the petitioner to settle the conditional amount, ensuring a fair opportunity for objections and a personal hearing in the subsequent proceedings. The judgment concluded by disposing of the writ petitions without costs and closing related miscellaneous petitions.