2022 (11) TMI 1122 - HC - GST

Maintainability of petition - Petition has been filed beyond the statutory period of limitation for filing appeal - violation of principles of natural justice - HELD THAT - The pre-assesment notice in DRC-01 has been issued on 25.05.2022 and the order proceeds on the basis of the petitioner's reply filed on 08.02.2022 in response to a verification of the petitioner's return in Form ASMT 10. Admittedly, the petitioner has not responded to notice dated 25.05.2022. Be that as it may, it was incumbent upon the authority under Section 74 of the Goods and Services Tax Act, 2017 to have heard the petitioner in person, prior to passing of the impugned order. That apart, the impugned order rejects the explanation tendered by the petitioner vide reply dated 08.02.2022 by way of a cryptic one liner stating 'dealer reply was verified and not accepted so far' - the confirmation of proposals in the manner as aforesaid, leaves me in no doubt that the impugned order is liable to be set aside. Petition allowed.

Summary

Issues:
Violation of principles of natural justice in the impugned order.

Analysis:
The judgment delivered by Honourable Dr. Justice Anita Sumanth of the Madras High Court pertains to a Writ Petition challenging an order dated 24.06.2022, filed beyond the statutory period of limitation for appeal. The primary contention raised was the violation of principles of natural justice. The pre-assessment notice in DRC-01 was issued on 25.05.2022, and the order was based on the petitioner's reply filed on 08.02.2022 in response to a verification. Notably, the petitioner did not respond to the notice dated 25.05.2022. The court emphasized that under Section 74 of the Goods and Services Tax Act, 2017, it was mandatory for the authority to hear the petitioner before passing the impugned order. Furthermore, the order's rejection of the petitioner's explanation was deemed insufficient, merely stating 'dealer reply was verified and not accepted so far'.

The court found the confirmation of proposals in the impugned order to be inadequate and ruled in favor of the petitioner, setting aside the order. The judgment directed for a fresh notice to be issued, ensuring the petitioner is heard, and orders are passed in compliance with the law within twelve weeks from the date of the judgment. Ultimately, the Writ Petition was allowed, with no costs imposed, and the connected Miscellaneous Petitions were closed. The decision highlights the significance of adhering to principles of natural justice and ensuring due process in administrative actions, particularly in matters concerning tax assessments and orders under the GST Act.