2024 (1) TMI 1354 - HC - GST

Seeking quashing of the impugned Adjudication Notice - It is the grievance of the petitioner that due to bonafide reasons, unavoidable circumstances and sufficient cause, it was not possible for the petitioner to collect and collate all relevant documents and submit the reply to the respondent - violation of principles of natural justice - HELD THAT - As rightly contended by the learned counsel for petitioner, though the respondent had issued audit notice on 07.01.2021, the impugned proceedings command only on Adjudication Notice dated 31.01.2023 when the Adjudication Notice was issued to which, the petitioner expressed his inability to submit his reply on the ground that certain documents were not available and requested for extension of time. Under these circumstances, the respondent clearly fell in error in coming to the incorrect conclusion that there was a long lapse of 768 days in the petitioner submitting his reply to the audit notice, which was not the subject matter of the adjudication proceedings under the notice dated 31.01.2023 issued by the respondent. It is clear that sufficient and reasonable opportunity has not been provided to the petitioner. Under these circumstances, in view of the submission of the petitioner that if one more opportunity is provided, the petitioner would appear before the respondent and submit its reply, documents etc., it is deemed just and proper to set aside the impugned order and remit the matter back to the respondent for reconsideration afresh in accordance with law. The impugned Adjudication Order dated 19.04.2023 Annexure-K is hereby set aside - The matter is remitted back to the respondent for reconsideration afresh in accordance with law - The petition is hereby partly allowed.

Summary

Issues:
Petition seeking quashing of Adjudication Notice and Order under KGST/CGST Act, 2017 for lack of opportunity and violation of natural justice.

Analysis:
The petitioner sought to quash the Adjudication Notice and subsequent Order issued under the KGST/CGST Act, 2017, alleging a lack of opportunity and violation of natural justice. The petitioner contended that, despite requesting time to locate invoices for blocked credit, the respondent proceeded to pass the impugned order without providing a reasonable opportunity. The petitioner argued that the respondent erred in calculating the delay in submission of the reply, as the Adjudication Notice was issued on 31.01.2023, and the subsequent order was passed on 19.04.2023. The petitioner claimed that there was no delay of 768 days, as incorrectly concluded by the respondent. The High Court Government Pleader supported the impugned order, stating that the petition lacked merit.

The Court noted that the respondent's error lay in incorrectly computing the delay in submitting the reply, as the Adjudication Notice was issued on 31.01.2023, and the petitioner had requested an extension of time. The Court emphasized that the delay was not 768 days, as claimed by the respondent. The Court found that the petitioner had not been provided with a sufficient and reasonable opportunity to respond. Therefore, the Court set aside the impugned order and remitted the matter back to the respondent for reconsideration in accordance with the law. The petitioner was directed to appear before the respondent on a specified date to submit the necessary documents and response. The respondent was instructed to provide the petitioner with an opportunity for a personal hearing and to pass appropriate orders in accordance with the law. The Court clarified that as the respondent had already provided the Excel Worksheet to the petitioner, the issue of providing further records/documents did not arise in this case.