2024 (4) TMI 284 - HC - GST

Violation of principles of natural justice - order in original has been passed ex-parte to the petitioner - HELD THAT - It would be in the interest of justice that the proceedings are remanded to the Adjudication Officer as there is clearly a breach of principles of natural justice as the petitioner was not granted an opportunity of being heard or even to file a reply to the show-cause-notice before the order-in-original was passed by the Adjudicating Officer which was admittedly an ex-parte order. Certainly, the law would mandate that a show-cause-notice is issued to the parties before any order is passed on the same. In the present case, the petitioner had made appropriate amendments on the GST portal, in view of change of its address which was on 23 October 2019 and 5 December 2019 as also admitted by the respondents in the reply affidavit. It clearly appears that the show-cause-notice was forwarded to the petitioner at an address which was in fact prior address before change of its address effected on 23 October 2019. The show cause-notice was not served on the petitioner, consequently the same was not replied and / or the petitioner could not put up a valid defence - this is a case which has resulted in breach of principles of natural justice in passing of the impugned order. The impugned order-in-original dated 30 August 2022 (Exhibit-B) is quashed and set aside - Proceedings stand remanded to the Adjudicating Officer, namely, the Commissioner, CGST Central Excise, Belapur Commissionerate - petition disposed off by way of remand.

Summary

Issues Involved:
The issues involved in this case are the validity of the show-cause-notice dated 30 December 2020 and the legality of the ex-parte order-in-original dated 30 August 2022, both issued by the Respondent No. 2, concerning a breach of principles of natural justice.

Validity of Show-Cause-Notice:
The petitioner contended that the order-in-original passed ex-parte on 30 August 2022 was challenged on grounds of being issued in breach of natural justice principles. It was argued that the show-cause-notice was sent to an outdated address, despite the petitioner having updated their address on the GST portal twice in 2019. As a result, the petitioner was unable to participate in the adjudication process, leading to the ex-parte order-in-original.

Breach of Natural Justice:
The petitioner highlighted that the impugned order was in violation of natural justice principles as the show-cause-notice was not served on the correct address, depriving the petitioner of the opportunity to respond. The Court acknowledged the breach and remanded the proceedings to the Adjudication Officer, emphasizing the importance of issuing a show-cause-notice before passing any order, as mandated by law.

Legal Remedy and Jurisdiction:
The respondent argued that the petitioner had an alternate remedy to challenge the order through an appeal, suggesting that the writ petition under Article 226 should not be entertained. However, the Court disagreed, citing Supreme Court judgments that allow the High Court to intervene under Article 226 in cases where there is a breach of natural justice. Referring to a recent Supreme Court decision, the Court reiterated the position that when proceedings are beyond jurisdiction or violate natural justice principles, the High Court can intervene.

Final Order:
In conclusion, the Court partly allowed the petition by quashing and setting aside the impugned order-in-original dated 30 August 2022. The proceedings were remanded to the Adjudicating Officer for further consideration, directing the petitioner to submit a reply to the show-cause-notice within four weeks. The Commissioner was instructed to schedule a hearing and pass a new order within eight weeks, keeping all contentions open. The petition was disposed of with no costs incurred.