2024 (3) TMI 391 - HC - GST

Opportunity for extension for filing response to the show cause denied - Recovery of Tax dues - Consideration for rejection of an application for extension was that more than six adjournments were granted - HELD THAT - Admittedly, in this case the show cause notice under Section 73(1) of the said Act had been issued on 12th September, 2023. Although, the petitioner had duly applied before the respondents seeking for an adjournment on the ground noted therein, on 11th October, 2023 within the due date to respond, the proper officer had purportedly rejected the same on the consideration that more than six adjournments had been granted. In this context, it may be relevant to consider the general provisions as regards grant of an opportunity to respond, to a show cause notice issued under section 73(1) of the said Act. 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 holding that more than six adjournments had been granted to the petitioner. There is no finding on the part of the respondent no. 1 that the petitioner did not make out sufficient cause for being denied the extension. Consideration for rejection of an application for extension was that more than six adjournments were granted - the reasoning provided for rejection of the extension application cannot be accpeted. Admittedly, the provisions of Section 73 and its sub sections are independent provisions. Having regard to the aforesaid, the manner in which the respondent no. 1 had proceeded to pass the final order without granting extension to the petitioner to file its response or to be offered personal hearing, despite the petitioner showing sufficient cause, appears to be a colourable exercise of power by the said authority. Consequently, directions issued for recovery of tax by the respondent no. 2, vide communication dated 15th February 2024 also cannot be sustained. The same is accordingly, quashed - petition allowed in part.

Summary

Issues involved:
The judgment involves issues related to impleading the Assistant Commissioner of State Tax and MR Charge, and challenging an order passed by the respondent under the CGST and WBGST Act, 2017.

Impleading of Assistant Commissioner of State Tax:
The petitioner sought to implead the Assistant Commissioner of State Tax and MR Charge as respondent no. 2. The Court permitted the impleadment based on the arguments presented by the respective advocates. The Department was directed to carry out the necessary amendment, leading to the disposal of the application.

Challenging Order under CGST and WBGST Act:
The writ petition challenged an order passed by the respondent on 6th November, 2023. The petitioner, a Cooperative Society engaged in collecting parking fees, claimed discrepancies in the scrutiny of returns. The respondent issued notices under various sections of the Act, leading to a final order determining liability under Section 73(9). The petitioner sought an extension to respond to the show cause notice, which was denied by the respondent. The petitioner argued that the order was passed without affording a reasonable opportunity of hearing, violating principles of natural justice. The respondent contended that the petitioner was provided with sufficient opportunities and had an alternative remedy through an appeal.

The Court observed that the respondent's actions were a colorable exercise of power and violated the principles of natural justice. The Court held that the petitioner should have been granted an extension and an opportunity for a personal hearing. The recovery notice issued by the respondent was quashed, and the petitioner was directed to file a response to the show cause notice by a specified date. The Court emphasized that the petitioner would not be entitled to further extensions or adjournments.

Conclusion:
The writ petition was partly allowed, and the connected application was disposed of. The Court's directions included quashing the recovery notice, setting a deadline for the petitioner to respond to the show cause notice, and instructing the respondents to schedule a personal hearing. The judgment highlighted the importance of adhering to principles of natural justice and ensuring a fair opportunity for parties involved in legal proceedings.