2024 (3) TMI 58 - HC - GST

Violation of principles of natural justice - Opportunity of personal haring not provided - it is submitted that although, there is an appellate provision, an appeal is no substitute for the order to be passed on consideration of the petitioner s response, which in this case has been denied - HELD THAT - Once, the petitioner had sought for an extension, the respondent no. 1 was obliged to consider the application for extension and ought not to have passed the final order without appropriately considering the petitioner s application for extension. The final order was also not passed immediately. The same was passed on 20th December, 2023, which is more than a month from the date the petitioner had sought for extension. Although, the discretion to grant an adjournment vests in the authority, in my view such discretion must be exercised judiciously. The manner in which the respondent no. 1 has proceeded to pass the final order without granting extension to the petitioner either to file its response or to be offered personal hearing, despite the petitioner showing sufficient cause, appears to be a colorable exercise of power by the said authority. Although it has been argued by the respondents that the petitioner has an alternative remedy in the form of an appeal, an appeal is no substitute to revisit of an ex-parte order, especially when the defense of the petitioner is not on record. Further since, the order stands vitiated on the ground of violation of the principles of natural justice, alternative remedy in the form of an appeal is no bar for exercise of extraordinary writ jurisdiction. Since the impugned order cannot be sustained, the same is set aside - Petition disposed off.

Summary

Issues involved: Challenge to order under Section 73(9) of the GST Act, 2017 for not granting extension for response and personal hearing.

Summary:
The petitioner challenged an order issued under Section 73(9) of the GST Act, 2017, contending that despite seeking an extension for response due to Durga Puja and business closure, the order was passed without considering their request. The petitioner claimed that only one extension was sought, while the law allows up to three extensions. The respondent argued that the petitioner had sufficient time to respond and has the option to appeal, hence the writ petition should not be entertained.

Upon review, the Court noted that the petitioner had shown sufficient cause for an extension as per Section 75(5) of the GST Act, which allows adjournment for valid reasons. The Court found that the authority should have considered the extension request before passing the final order, as passing the order without granting an extension or personal hearing seemed like a misuse of power. The Court emphasized that an appeal cannot replace a fair consideration of the petitioner's response, especially when natural justice principles are violated.

Consequently, the Court set aside the impugned order, directing the petitioner to file a response by a specified date and the respondent to schedule a personal hearing thereafter. If the petitioner fails to respond, the respondent is permitted to proceed as deemed appropriate. The writ petition was disposed of with these directions, and no costs were awarded.