2021 (4) TMI 968 - HC - GST

Principles of Natural Justice - input tax credit - whether the term other civil structure used in the definition of Plant and Machinery restricts the Landfilling pit from considering it as Plant and Machinery and thereby restricts the Input Tax Credit (ITC) under Section 17(5)(d) of the GST Act? - HELD THAT - In the present case principles of natural justice and fair play have certainly been violated as the report of the Principal Commissioner of Central Tax was never given to the petitioner at any point of time. The petitioner has now obtained a detailed report submitted by the Principal Commissioner of Central Tax from the Right to Information Act and he is having the aforesaid report. Keeping in view the fact that the principles of natural justice and fair play has been violated, alternative remedy will not be a bar in the present case, the matter is remitted back to the Authority for Advance Ruling - The petitioner shall appear before the Authority for Advance Ruling on 26.04.2021 - Petition allowed by way of remand.

Summary

Issues: Violation of principles of natural justice and fair play in passing an order by the Authority for Advance Ruling.

In the present case, the petitioner, a registered dealer under the Goods and Services Tax Act, filed an application seeking an advance ruling on whether a specific term in the definition of 'Plant and Machinery' restricts the Landfilling pit from being considered as such, affecting the Input Tax Credit (ITC) under Section 17(5)(d) of the GST Act. The Authority for Advance Ruling passed an order on 11.09.2020 based on a report from the Principal Commissioner of Central Tax, stating that the structure in question is a concrete structure. However, the petitioner was not provided with this report, leading to an argument that the order was violative of the principles of natural justice and fair play.

The learned counsel for the petitioner contended that the report from the Principal Commissioner of Central Tax was not shared with the petitioner, depriving them of a fair opportunity to respond to the same. The Court, after careful consideration, found that the principles of natural justice and fair play were indeed violated in this case. Consequently, the Court set aside the order dated 11.09.2020 and remitted the matter back to the Authority for Advance Ruling. The petitioner was directed to appear before the Authority on a specified date, with instructions to consider the report submitted by the Principal Commissioner of Central Tax, which is now in the petitioner's possession. The Authority was directed to pass an appropriate order within 45 days without being influenced by its earlier decision, emphasizing that the Court did not express any opinion on the merits of the case.

The Court's decision to allow the writ petition was based on the clear violation of procedural fairness and natural justice in the original order passed by the Authority for Advance Ruling. By remitting the matter back for fresh consideration, the Court ensured that the petitioner would have a fair opportunity to present their case with all relevant information available, thereby upholding the principles of fairness and due process in the adjudicatory process.