2024 (1) TMI 807 - HC - GST

Violation of principles of natural justice - neither SCN was served upon the petitioner nor any opportunity of hearing was afforded to the petitioner - HELD THAT - Considering the facts and circumstances of the present case, the provisions of Section 73 read with Section 75(4) of the WBGST/CGST Act, 2017, proper officer is bound to afford an opportunity of hearing where either a request in writing is received by him from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. To afford opportunity of hearing is a statutory mandate which cannot be violated by proper officer and in the event of violation the order passed by the proper officer cannot be sustained. Under the circumstances, the impugned order dated 25.03.2021 passed by the proper officer for the period April 2018 to March 2019 cannot be sustained and deserves to be quashed and the matter deserves to be remanded to the concerned Authority to pass an order afresh in accordance with law after affording reasonable opportunity of hearing to the petitioner/appellant. Article 226 of the Constitution of India confers very wide powers on High Courts to issue writs but this power is discretionary and the High Court may refuse to exercise the discretion if it is satisfied that the aggrieved person has adequate or suitable remedy elsewhere. It is a rule of discretion and not rule of compulsion or the rule of law. Even though there may be an alternative remedy, yet the High Court may entertain a writ petition depending upon facts of each case. It is neither possible nor desirable to lay down inflexible rule to be applied rigidly for entertaining a writ petition. The impugned order dated 25.03.2021 for the period from April 2018 to March 2019 passed by the Assistant Commissioner of State Tax (GST), Jalpaiguri Charge under Section 73 of the WBGST Act, 2017 and CGST Act, 2017, cannot be sustained and is hereby quashed - Matter is remitted back to the proper officer/Assistant Commissioner of State Tax (GST) Jalpaiguri charge to pass an order afresh in accordance with law under Section 73 of the WBGST Act, 2017/CGST Act, 2017, after affording reasonable opportunity of personal hearing to the appellant/petitioner - Petition allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are the breach of provisions of Section 73 and Section 75(4) of the Act, 2017, lack of opportunity of hearing, and the availability of statutory remedy under Section 107 of the WBGST/CGST Act, 2017.

Breach of Provisions of Section 73 and Section 75(4) of the Act, 2017:
The appellant/petitioner contended that the impugned assessment order was passed in violation of Section 73 and Section 75(4) of the Act, 2017, and principles of natural justice. The appellant argued that no show cause notice was served, and no opportunity of hearing was provided before the adverse decision was made. The Court noted that the show cause notice did not specify a date, time, or place for the hearing, which is required under Section 75(4) of the Act. The Court referred to a similar case in the Allahabad High Court to emphasize the importance of granting an opportunity of hearing when an adverse decision is contemplated.

Lack of Opportunity of Hearing:
The Court observed that the proper officer failed to afford an opportunity of hearing as mandated by Section 75(4) of the Act, 2017. The show cause notice did not mention any date, time, or venue for a personal hearing, which is essential for the petitioner to present their case effectively. The Court held that the absence of an opportunity of hearing rendered the impugned order unsustainable, and the matter was remanded for a fresh decision after providing a reasonable opportunity of hearing to the appellant/petitioner.

Availability of Statutory Remedy under Section 107:
The respondents argued that the appellant should have pursued the statutory appeal under Section 107 of the Act before filing the writ petition. However, the Court held that the availability of an alternative remedy would not be a complete bar to entertaining a writ petition under Article 226 of the Constitution if there is a breach of statutory mandate or principles of natural justice. The Court cited various principles established by the Supreme Court to support the discretion of High Courts in entertaining writ petitions despite the availability of alternative remedies.

Conclusion:
The High Court set aside the impugned judgment and order, quashed the assessment order passed by the Assistant Commissioner of State Tax, and allowed the appeal filed by the appellant/petitioner. The matter was remitted back to the proper officer for a fresh decision in accordance with the law after affording a reasonable opportunity of hearing. The Court emphasized the importance of following statutory mandates and principles of natural justice in such matters.