2023 (7) TMI 96 - HC - GST

Violation of the principles of natural justice - petitioner was not given an opportunity to put forward his case - Sun Steels is an existent firm with a GST registration or not - HELD THAT - When the matter had come up for admission, learned counsel for the petitioner pointed out that the fact, based on which the show cause notice has been issued that the supplier of the petitioner was non-existent, stands disproved by the fact that the said supplier viz., Sun Steels is registered under GST and they have also paid tax in respect of the supply made to the petitioner. Therefore, had the petitioner been afforded an opportunity of personal hearing, he could have clarified the same to the respondent. This fact has not been refuted by the respondent. Considering the fact that the petitioner has not been afforded an opportunity of personal hearing to produce his documents, particularly when the petitioner is in possession of the documents to disprove the claim of the petitioner, the impugned order has to necessarily be set aside and accordingly, is set aside - matter is remitted back to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are regarding the issuance of a Writ of Certiorarified Mandamus to quash an order related to GST tax period 2018-19, alleging illegality and arbitrariness, and seeking a fresh order after affording a reasonable opportunity of being heard to the petitioner.

Details of the Judgment:

1. The petitioner, a hardware dealer with GST registration, received an order from the respondent stating that he had availed input tax credit from a non-existent taxpayer named Sun Steels, resulting in a demand for recovery of Rs. 71,604 along with a penalty. The petitioner claimed that he did not receive a notice of personal hearing after the show cause notice, thus alleging a violation of principles of natural justice.

2. The petitioner contended that Sun Steels is a legitimate firm with GST registration, having filed returns and paid taxes for supplies made to the petitioner. During the hearing, it was revealed that the basis for the show cause notice, i.e., the non-existence of Sun Steels, was disproved as Sun Steels was indeed a registered entity paying taxes. The petitioner was not given an opportunity to present this information, leading to the impugned order being set aside.

3. The High Court allowed the writ petition, setting aside the impugned order and remitting the matter back to the respondent for fresh consideration. The petitioner was directed to submit necessary documents within a week, including invoice copies, e-way bill copies, and payment details, for the respondent's review within six weeks. No costs were awarded, and connected miscellaneous petitions were closed as a result of the judgment.