2024 (6) TMI 1240 - HC - GST

Violation of principles of natural justice - irrelevant notification was applied in respect of sanitary ware - petitioner's request for an adjournment in response to the show cause notice was denied and a wrong notification was applied - HELD THAT - On perusal of the impugned order, it appears that the respondent applied Notification No.5/2020 dated 16.10.2020. The petitioner has placed on record the said notification. The notification applies to satellite launch services and not to sanitary ware. The petitioner has also placed on record Notification No.6/2018, which reduces the GST rate on sanitary ware to18% from the earlier 28%. By reply dated 19.09.2023 the petitioner requested for an adjournment for reasons stated therein up to 07.10.2023. Such request was denied. As a result, the tax proposal was confirmed without considering the petitioner's response on merits. The impugned order dated 20.09.2023 is set aside and the matter is remanded for re-consideration. The petitioner is directed to submit a reply to the show cause notice within fifteen days from the date of receipt of the copy of this order - petition disposed off by way of remand.

Summary

Issues:
Challenge to order on grounds of breach of natural justice and application of irrelevant notification in respect of sanitary ware.

Analysis:
The petitioner, a dealer in sanitary ware, contested an order dated 20.09.2023, claiming a breach of natural justice and the incorrect application of a notification related to GST rates. The petitioner argued that the correct GST rate for sanitary ware was 18% as per Notification No.6/2018-Central Tax (Rate), but the respondent erroneously applied Notification No.5/2020, which pertains to satellite launch services. The petitioner's request for an adjournment to respond to the show cause notice was denied, leading to the filing of the writ petition.

The petitioner's counsel highlighted that the respondent proceeded with the assessment order without granting the requested time extension until 07.10.2023, as per the petitioner's reply dated 19.09.2023. It was emphasized that the respondent's application of the incorrect notification was a crucial error in the impugned order. On the other hand, the respondent argued that the petitioner had already been given 66 days' time and, therefore, the request for further adjournment was rejected.

Upon examining the impugned order, it was evident that the respondent had indeed applied the wrong notification, as pointed out by the petitioner. Notification No.5/2020, concerning satellite launch services, was erroneously used instead of Notification No.6/2018, which specifically addressed the GST rate reduction for sanitary ware. The court, in light of these discrepancies, set aside the order dated 20.09.2023 and remanded the matter for reconsideration. The petitioner was directed to submit a response to the show cause notice within fifteen days, after which the respondent was instructed to provide a fair opportunity, including a personal hearing, before issuing a fresh order within three months.

In conclusion, the writ petition was disposed of with no costs imposed, and the related miscellaneous petitions were closed as per the terms outlined in the judgment.