2024 (6) TMI 1159 - HC - GST

Violation of principles of natural justice - Failure to provide a personal hearing to the petitioner - Imposition of liability for cess along with penalty - HELD THAT - On perusal of the impugned order, it is evident that such order was preceded both by an intimation and a show cause notice. In reply to such show cause notice, the petitioner replied by submitting details of purchases made by him and outward supplies made by him. It is also clear from the impugned order that a personal hearing was not offered to the petitioner because the petitioner did not opt for the same. Sub-section (4) of Section 75 mandates that a personal hearing be provided if an order adverse to the tax payer is proposed to be issued. Interference is warranted but by taking into account the fact that the petitioner's liability for payment of cess, from the electronic credit ledger or otherwise, is not seriously disputed, the interest of justice warrants that the revenue interest be protected. The matter is remanded for reconsideration on condition that the petitioner remits 15% of the amounts payable towards cess under the impugned order within a period of two weeks from the date of receipt of a copy of this order - petition disposed off by way of remand.

Summary

Issues involved: Challenge to order imposing liability for cess without personal hearing.

In this case, the petitioner challenged an order imposing liability for cess along with penalty, contending that a personal hearing was not provided. The petitioner argued that the liability was limited to cess payable under the Goods and Services Tax (Compensation to States) Act, 2017, and due to the initial period of GST implementation, they were unaware of such liability. The counsel for the petitioner highlighted that the lack of personal hearing was due to the petitioner not requesting it and sought an opportunity for the same, emphasizing the availability of requisite credit in the petitioner's electronic credit ledger.

The learned Government Advocate representing the respondent accepted notice and pointed out that the petitioner admitted liability for the payment of cess. She argued that no interference was warranted in this case. Upon reviewing the impugned order, it was noted that the order followed both an intimation and a show cause notice. The petitioner had responded to the show cause notice by providing details of purchases and supplies. The absence of a personal hearing was attributed to the petitioner not opting for it. Section 75(4) mandates a personal hearing if an adverse order is proposed. Despite the undisputed liability for cess payment, it was deemed necessary to protect the revenue interest in the interest of justice.

Consequently, the court set aside the impugned order and remanded the matter for reconsideration under certain conditions. The petitioner was directed to remit 15% of the amounts payable towards cess within two weeks and submit a detailed reply to the show cause notice within the same period. Upon satisfaction of the payment and receipt of the reply, the respondent was instructed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months. As the assessment order was overturned, the bank attachment was lifted. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.