2024 (5) TMI 548 - HC - GST

Violation of principles of natural justice - violation of conditions in Section 65 of the respective GST Acts and that summary of the Show Cause Notice was issued to the petitioner - no prior intimation as is contemplated under Section 65(3) of the Act - HELD THAT - The allegation that the respondent has violated Section 65 of the respective GST Enactment cannot be countenanced as the petitioner has not only participated in the proceedings before issuance of the Notice in Form GST DRC-01A dated 11.03.2022 but also filed a detailed reply to the Show Cause Notice in Form DRC-01 dated 09.03.2023. What has been enclosed today along with Writ Petition is only the summary of the Show Cause Notice in Form DRC-01 dated 09.03.2023. The summary of the Show Cause Notice, to which, the petitioner has filed reply and additional reply, is itself a detailed Show Cause Notice running to 146 pages. Therefore, the submission of the learned counsel for the petitioner that the respondent has violated the rights of the petitioner cannot be countenanced. Considering the fact that the reply of the petitioner has not been considered by the respondent in detail in the impugned order, the impugned order is quashed and the case is remitted back to the respondent to pass a fresh order - petitioner is willing to deposit 10% of the disputed tax amount of Rs. 11,59,31,746/-. The submission stands recorded. Therefore, the petitioner is directed to deposit 10% of the disputed tax amount of Rs. 11,59,31,746/- before the respondent on or before 30.05.2024. Petition disposed off.

Summary

Issues involved:
The judgment involves a challenge to an order passed by the respondent for the Assessment Year 2017-2018, primarily based on alleged violations of conditions in Section 65 of the respective GST Acts and the principles of natural justice.

Violation of Section 65 of GST Acts:
The petitioner contested the impugned order on grounds of violation of Section 65 of the GST Acts, citing issues with the authorization of the Audit conducted at their premises and lack of prior intimation as required by the Act. The petitioner also highlighted non-compliance with the provision for providing the Audit Report within 30 days, leading to a lack of opportunity to respond effectively to the Show Cause Notice.

Principles of Natural Justice:
The petitioner argued that the Show Cause Notice issued was merely a summary and not a detailed copy, impairing their ability to respond adequately. The dispute arose from discrepancies in returns filed by the petitioner and their suppliers, further emphasizing a violation of natural justice principles due to the lack of detailed information provided.

Respondent's Defense:
The Government Advocate for the respondent refuted the petitioner's claims, providing a detailed sequence of events leading up to the assessment order. They asserted that the petitioner had been duly informed and involved in the audit and subsequent proceedings, with multiple opportunities given for responses and hearings.

Judgment and Decision:
After considering both parties' submissions, the Court found that while the petitioner had actively participated in the proceedings, their detailed replies had not been adequately considered in the impugned order. As a result, the order was quashed, and the case remitted back to the respondent for a fresh decision. The petitioner was directed to deposit 10% of the disputed tax amount before a specified date. The impugned order was treated as a corrigendum to the Show Cause Notice, allowing the petitioner to file a reply within a given timeframe. The respondent was instructed to pass a fresh order within 30 days after the deposit, ensuring the petitioner's right to be heard. Failure to comply with the deposit requirement would result in the dismissal of the writ petition and affirmation of the impugned order, allowing for recovery proceedings. Pending the deposit, recovery proceedings were to be halted.

Conclusion:
The Court disposed of the Writ Petition without costs, setting clear directives for the parties involved and establishing a timeline for the resolution of the matter.