2023 (11) TMI 451 - HC - GST

Maintainability of petition - opportunity of hearing not provided to petitioner - violation of principles of natural justice - HELD THAT - Upon consideration of the submission made on behalf of the parties, this Court is inclined to hold that since the petitioner had no opportunity to appear before the authority to substantiate his case or file a reply to the show cause notice issued by the authority due to his precarious medical condition, justice demands that the petitioner be given an opportunity of hearing by the authority before any liability is slapped upon him. The order impugned passed on 24th August, 2021 is set aside - Petition disposed off.

Summary

Issues:
The issues involved in this judgment are related to the jurisdiction of tax laws governing a contract, the petitioner's inability to respond to a show cause notice due to health reasons, and the need for affording the petitioner an opportunity of hearing before any penalty is imposed.

Jurisdiction of Tax Laws:
The petitioner contended that the contract is governed by the Value Added Tax Act and not by the Central Goods and Service Tax Act and West Bengal Goods and Service Tax Act. However, the respondents referred to a circular stating that the contract falls under the latter tax laws. The Court held that the petitioner should be given an opportunity to present his case before any liability is imposed.

Inability to Respond Due to Health Reasons:
The petitioner, engaged in a proprietorship business, was unable to reply to a show cause notice alleging tax evasion due to being a patient of carcinoma. Despite the directive to make payment, the petitioner sought a chance to explain his position. The Court acknowledged the petitioner's medical condition and emphasized the need for a fair hearing before any penalty is enforced.

Opportunity of Hearing:
Considering the submissions from both parties, the Court set aside the earlier order and directed the concerned authority to reevaluate the matter after providing the petitioner with a reasonable opportunity of hearing. The authority was instructed to issue a reasoned order within six weeks, allowing the petitioner to submit relevant documents in support of his case during the hearing. The Court clarified that it had not delved into the case's merits, granting the authority independence in its decision-making process.

This judgment highlights the importance of procedural fairness and the right to be heard, especially in cases where a party's health condition hinders their ability to respond to legal notices.