2023 (6) TMI 137 - HC - GST

Principles of Natural Justice - reply filed belatedly - contention of the petitioner that the impugned order passed is without affording an opportunity of hearing and that their reply filed in Form DRC 06 has been rejected as having been belatedly filed - HELD THAT - Admittedly reply has been rejected stating that, it was beyond the period prescribed. However, it must be noticed that though the reply itself came to be rejected as having been filed belatedly, in the reply filed by the petitioner. The mandate under Section 75(4) of the CGST Act, 2017 is clear that, when a written request is made from the person chargeable with tax or penalty seeking for personal hearing, the same is required to be considered. Clearly there is violation of the mandate under Section 75(4) of the Act and the submission of the learned counsel for the Revenue that the request for personal hearing was made out in the reply, which having been rejected, the request for personal hearing is also to be rejected is a hyper technical interpretation which has resulted in rejection of the opportunity under Section 75(4) of the Act, which cannot be accepted. Accordingly, case is made out for setting aside the impugned order in the light of the violation of the non granting of opportunity of personal hearing under Section 75(4) of the Act and the respondents are directed to afford an opportunity of personal hearing before proceeding with the order. In order to meet the ends of justice, it is just and appropriate to direct the Authority to look into the reply that has been filed by the petitioner and also permit the petitioner to raise additional legal contentions as has been raised in the present writ petition. The petitioner however, is liable to pay costs of Rs. 10,000/- to the respondents for lapse in filing a delayed reply. The impugned order at Annexure-A is set aside - Appeal allowed.

Summary

Issues involved:
The correctness of the order passed under Sections 73(9), 50 & 122(2) of the Karnataka Goods and Services Tax Act (KGST) / Central Goods and Services Tax Act, 2017 (CGST) / Section 20 of the Integrated Goods and Services Tax Act, 2017 (IGST) read with Rule 142(5) and (6) of the KGST Rules, 2017 for the Tax Period 2017-18 (July 2017-March 2018) without affording an opportunity of hearing.

Summary:

Issue 1: Opportunity of Hearing
The petitioner challenged the order passed without affording an opportunity of hearing, contending that their reply was rejected as belatedly filed. The petitioner argued that even if the reply was filed late, the obligation to provide an opportunity of hearing under Section 75(4) of the CGST Act, 2017 should not be disregarded.

Judgment: The Court noted that the reply was rejected for being filed beyond the prescribed period. However, the petitioner had requested a personal hearing in the reply, as mandated by Section 75(4) of the CGST Act, 2017. The Court found a violation of this mandate and set aside the impugned order, directing the respondents to afford the petitioner a personal hearing before proceeding further.

Issue 2: Additional Legal Contentions
The Court directed the Authority to consider the petitioner's filed reply and allowed the petitioner to raise additional legal contentions. The petitioner was ordered to pay costs of Rs. 10,000/- to the respondents for the delayed reply filing.

Judgment: The impugned order was set aside, and the petitioner was instructed to appear before respondent No.1 on a specified date. Failure to avail of this opportunity would allow the respondents to proceed as if no order had been passed in the matter.