2024 (3) TMI 1269 - HC - GST

Violation of principles of natural justice - challenge to Summary Order passed without issuance and service of DRC-01 - opportunity of hearing to the Petitioner not afforded - HELD THAT - Having regard to the materials produced by the petitioner, the objection raised by Mr. Ashok Kumar Yadav, the learned Senior SC-I as to maintainability of this writ petition must be rejected. This is quite a well-settled preposition that the jurisdiction of the writ petition under Article 226 of the Constitution of India is plenary in nature and without any fetters, much less any technical objection. In WHIRLPOOL CORPORATION VERSUS REGISTRAR OF TRADE MARKS, MUMBAI ORS. 1998 (10) TMI 510 - SUPREME COURT , the Hon ble Supreme Court clearly indicated that in cases where the order has been passed in breach of natural justice or the Authority passing the order lacks jurisdiction the writ petition is maintainable. Even so, statutory remedy to the aggrieved party is not always a ground not to entertain the writ petition. Having regard to the materials on record, it is opined that the matter needs to be remitted back to the State Tax Officer who shall pass an appropriate order after affording an opportunity to the petitioner-Firm to place its defence by filing his reply to the notice dated 20th September 2021. Therefore, summary order dated 9th April 2022 is quashed. The petitioner-Firm shall be at liberty to produce the materials which form part of this writ petition and any other material in support of its defence. Petition disposed off by way of remand.

Summary

Issues involved:
The issues involved in this case include the passing of a summary order without following proper procedures under the CGST Act, cancellation of Goods & Services Tax registration due to mismatch in forms, and the necessity of affording the petitioner an opportunity of hearing.

Summary:
In this writ petition, the petitioner sought various reliefs including challenging the legality of a Summary Order in Form DRC-07 issued without proper notice under Section 73(1) of CGST Act, 2017. The petitioner's Goods & Services Tax Registration was also cancelled for alleged discrepancies, which the petitioner attributed to a mistake by another entity. The High Court observed that the notices were sent to an outdated email address of the petitioner, leading to a lack of opportunity to respond. The Court held that the matter should be remitted back to the State Tax Officer for proper consideration after the petitioner is given a chance to present its defense. The summary order was quashed, and the petitioner was granted liberty to file a show-cause reply by a specified date, with the petitioner's bank account to be unfrozen accordingly.

The Court noted that the jurisdiction of the writ petition under Article 226 of the Constitution of India is broad and can be invoked in cases of breach of natural justice or lack of jurisdiction. The petitioner's explanation for the discrepancies found in the tax returns was considered valid, and it was deemed that the department had erred in sending notices to an outdated email address. The Court emphasized the importance of affording the petitioner a fair opportunity to respond to the allegations before taking any adverse actions.

The Court directed the State Tax Officer to reconsider the matter after the petitioner submits its reply to the notice dated 20th September 2021. The petitioner was given the liberty to present additional materials in support of its defense. The writ petition was deemed successful to the extent that the summary order was quashed, and the petitioner was granted the opportunity to file a show-cause reply by a specified deadline. The petitioner's bank account was ordered to be unfrozen upon receipt of the Court's order.

The Court's decision highlights the significance of procedural fairness and the need for authorities to ensure that proper opportunities are given to affected parties to present their side of the case before taking any adverse actions.