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2023 (8) TMI 1354 - HC - GSTValidity of rejection of Advance Ruling application - application rejected without due opportunity to show cause against the reason assigned - violation of principles of natural justice - HELD THAT - This Court is of the considered view that opportunity of hearing as contemplated under Section 98(2) cannot be an empty formality, and the petitioner should have been informed that the application could be rejected without admission on the ground the corresponding contractual period has expired. Therefore, this Court is persuaded to opine that the opportunity of hearing contemplated is rendered a mere formality. The petitioner must therefore have appropriate liberty to file additional plea to show cause against such reasoning and the respondent must reconsider the application. The question whether even a petition filed against the Advance Ruling Authority s order under Section 98(2) or 98(4) of the CGST Act/KGST Act could be considered in its full import in an appropriate case, but for the present, this Court is of the considered view that as the interference is with the Advance Ruling Authority s order under Section 98(2) of the CGST Act/KGST Act on the ground of denial of opportunity of hearing as contemplated under the Statute which inheres the principles of natural justice, this petition need not be placed before a Division Bench. The petition is allowed in part, and the respondent s order dated 29.11.2022 Annexure-A rejecting the petitioner's application for advance ruling without admitting it for detailed consideration is quashed and the application is restored for reconsideration with due opportunity to the petitioner.
Issues involved:
The rejection of the petitioner's application for advance ruling under Section 98(2) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 without due opportunity to show cause against the reason assigned. Issue 1: Rejection of Application without Opportunity for Hearing The petitioner's grievance is that their application was rejected without being admitted for detailed hearing, depriving them of the opportunity to show cause against the reason assigned. The respondent's order under Section 98(2) of the CGST Act/KGST Act was challenged on the grounds of denial of opportunity of hearing as per the principles of natural justice. Details: - The respondent rejected the application, stating that it was filed after the expiry of the contractual period for construction and maintenance work. - The petitioner argued that they were not informed that the application could be rejected without admission on this ground, rendering the opportunity of hearing a mere formality. - The Court held that the opportunity of hearing cannot be an empty formality and that the petitioner should have been informed about the possibility of rejection based on the expired contractual period. - The Court quashed the respondent's order and restored the application for reconsideration, allowing the petitioner to file additional plea upon receiving notice of further hearing. Issue 2: Jurisdiction of Division Bench The question arose whether every challenge to an advance ruling should be placed before a Division Bench of the High Court. Reference was made to a previous case where it was held that challenges to advance rulings should be heard directly by a Division Bench to ensure expeditious resolution. Details: - The Court considered the question of whether petitions against orders under Section 98(2) or 98(4) of the CGST Act/KGST Act should be heard by a Division Bench. - While acknowledging the importance of expeditious resolution, the Court decided that in this case, interference with the Advance Ruling Authority's order under Section 98(2) did not necessitate placement before a Division Bench. - The Court allowed the petition in part, emphasizing the need for due opportunity for the petitioner in the reconsideration of the application. This judgment highlights the significance of providing a fair opportunity for parties to be heard in matters of advance rulings under the GST Acts, ensuring that the principles of natural justice are upheld throughout the adjudicative process.
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