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2022 (10) TMI 246 - HC - GSTValidity of Assessment cum Penalty cum Interest Order - copies of the material relied on, not furnished - material alleged to have been seized from the business premises of the petitioner was not enclosed, so as to enable to file a suitable reply - violation of principles of natural justice. Whether the impugned order under challenge is liable to be set-aside on the ground that it was issued without following the principles of natural justice? HELD THAT - On 15.02.2022 a show- cause notice was issued and thereafter personal hearing notices were issued on 21.03.2022, 05.05.2022 and 11.05.2022. There is no dispute to the fact that the petitioner submitted reply on 01.03.2022 which was received in the office of the 1st respondent on 16.04.2022. As is evident from the copy of the objections, dated 01.03.2022, submitted by the petitioner, the petitioner raised disputed questions of facts - there is no whisper or there is no request in the reply to the show-cause, dated 01.03.2022, that the petitioner is not aware of the contents of the slips that were seized from the business premises of the petitioner. It is an admitted fact that the petitioner produced other books of accounts on notice from the assessing authority as such he has knowledge about the contents of the slips. A perusal of the objections, dated 01.03.2022, would show that the petitioner has knowledge of the contents of the slips also. He never made any request to furnish copies of the material alleged to have been seized. The case of ITC LIMITED VERSUS THE ASSISTANT COMMISSIONER COMMERCIAL TAXES 2009 (9) TMI 1071 - ANDHRA PRADESH HIGH COURT , was a case where the petitioner made an application for furnishing the report of the Enforcement Official but the respondent declined to furnish on the ground that the report of the Enforcement Official is communicated for internal circulation. This Court held that when a report of the Enforcement Official is relied upon in a show cause notice, the request for a copy when asked by the assessee has to be furnished - In the case on hand, the basis for issuance of show-cause notice to the petitioner was the material seized from the business premises of the petitioner and the petitioner could submit his objections to the show-cause notice without there being any further request to supply the material, which was seized from the business premises of the petitioner. So, the decision of this Court in ITC Limited, Sarapaka, Khammam District will not be of any help to the petitioner, to prove that there was violation of principles of natural justice. There is no denial of the fact that the petitioner is disputing correctness of the amounts that was arrived at by the 1st respondent. It is well settled under Article 226 of the Constitution of India, this Court cannot go into factual aspects. Further, there is no dispute that the petitioner has a right of Appeal under Section 107 of the CGST Act, 2017. As the petitioner has an alternative remedy of appeal under Section 107 of the GST Act and as the petitioner failed to succeed in establishing that there has been violation of the principles of natural justice, it is held that the Writ Petition is liable to be dismissed. It is open to the petitioner to avail the remedy available under law, in which event the period of pendency of Writ Petition before this Court be given set-off while calculating the period of limitation - Petition dismissed.
Issues Involved:
1. Violation of principles of natural justice. 2. Arbitrary assessment and imposition of tax, penalty, and interest. 3. Maintainability of the writ petition under Article 226 of the Constitution of India. Detailed Analysis: 1. Violation of Principles of Natural Justice: The petitioner contended that the impugned assessment order was passed without furnishing copies of the material relied upon, violating the principles of natural justice. The petitioner argued that the material seized during the inspection was not provided with the show-cause notice, preventing the petitioner from filing a suitable reply. The petitioner cited multiple judicial precedents to support this claim. However, the court noted that the petitioner did not request the material in the objections filed and had knowledge of the contents of the slips. The court held that the petitioner failed to establish a violation of natural justice as the material was seized from the petitioner's premises, and the petitioner had opportunities to respond. 2. Arbitrary Assessment and Imposition of Tax, Penalty, and Interest: The petitioner challenged the assessment on the grounds of arbitrariness and incorrect figures. The first respondent conducted an inspection, seized slips, and issued a show-cause notice stating that the petitioner did not account for certain purchases and sales, leading to tax evasion. The petitioner argued that some slips did not relate to them and some transactions were already recorded in the books. The court observed that the petitioner had the opportunity to raise these issues during the assessment process and failed to do so effectively. The court also noted that disputed questions of fact could not be addressed under Article 226. 3. Maintainability of the Writ Petition under Article 226: The petitioner argued that the writ petition was maintainable due to the violation of natural justice and the onerous condition of statutory deposit for an appeal. The respondent contended that the petitioner had an alternative remedy of appeal under Section 107 of the CGST Act. The court referred to the Supreme Court's decision in Chand Ratan v. Durga Prasad, emphasizing that when a statute prescribes a remedy, it must be exhausted before seeking a writ. The court concluded that the petitioner had an alternative remedy and failed to prove a violation of natural justice, making the writ petition unsustainable. Conclusion: The court dismissed the writ petition, holding that the petitioner had an alternative remedy of appeal and failed to establish a violation of the principles of natural justice. The court allowed the petitioner to avail the statutory remedy, with the period of pendency of the writ petition to be set-off while calculating the period of limitation for the appeal.
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