2022 (9) TMI 207 - HC - GST

Revocation of erroneous refund claim - refusal of personal hearing - violation of principles of natural justice - HELD THAT - This Court not going into the merits contested by both the petitioner and the respondents, finds the petitioner had sent a detailed representation dated 07.01.2022 which received by the respondents on 10.01.2022 which is not disputed. The only objection of the Department is that the postal/physical reply not considered, since it was not sent through portal. The petitioner deserves personal hearing so that his objections can be heard. This case is for erroneous refund. In such circumstances, it would be appropriate that personal hearing is given and the documents considered, thereafter the Department to proceed further. In view of the same, the Department to give opportunity of personal hearing to the petitioner, hear the objections, peruse the documents submitted and the explanations. The Department submits that now the file of the petitioner transferred to the second respondent. The second respondent is directed to fix the personal hearing date for the petitioner, give him an opportunity, receive any documents if produced and thereafter proceed with the show cause notices issued earlier in SCN Reference No.223011210520025 dated 30.11.2021 for the tax period July 2017 to March 2018 and in SCN Reference No. 223011210520145 dated 30.11.2021 for the tax period April 2018 to May 2018. Petition disposed off.

Summary

Issues:
1. Failure to provide an opportunity of personal hearing before passing an adverse decision.
2. Dispute regarding the mode of communication for replies and representations.
3. Allegations of violation of principles of natural justice.

Issue 1: Failure to provide an opportunity of personal hearing before passing an adverse decision:
The petitioner contended that the show cause notice for revoking an erroneous refund claim was issued, and a reply was sent within the stipulated time. However, the petitioner claimed that the personal hearing notice was not sent to the portal register of the respondents. The Court emphasized the importance of granting a personal hearing before imposing any adverse decision, as per Section 75(4) of the Central Goods and Service Tax Act, 2017. The Court held that the petitioner deserved a personal hearing to present objections and for the department to consider the documents submitted.

Issue 2: Dispute regarding the mode of communication for replies and representations:
The respondents argued that all communication between the assessee and the department should be through the portal, including replies to show cause notices. The petitioner, however, highlighted that unregistered dealers may not have portal access and should be allowed to send physical representations. The Court noted that physical representation was sent by the petitioner, received by the respondents, but not considered due to it not being sent through the portal. The Court directed the department to provide the petitioner with a personal hearing opportunity and consider the submitted documents.

Issue 3: Allegations of violation of principles of natural justice:
The petitioner alleged a violation of principles of natural justice due to the non-consideration of the physical representation sent. The respondents claimed to have served notices through email and the common portal, providing details of personal hearing dates. Despite multiple notifications for personal hearings, the petitioner failed to appear or provide explanations. The Court found that the petitioner had sent a detailed representation, which was received by the respondents, and directed the department to fix a personal hearing date for the petitioner within three months to address the disputed show cause notices.

In conclusion, the High Court of Madras directed the department to provide the petitioner with a personal hearing opportunity, consider the objections and documents submitted, and proceed with the show cause notices within a specified timeframe. The writ petitions were disposed of with no costs awarded, and connected miscellaneous petitions were closed.