2024 (8) TMI 771 - HC - GST

Seeking issuance of a Writ of Certiorari to call for the records in connection with the order passed by the 2nd respondent - improper order by 2nd respondent without proper notice and opportunity to rectify - Violation of principles of natural justice - HELD THAT - In the present case, the learned Government Advocate for the respondents contended that three notices were issued to the petitioner. According to the petitioner, the petitioner was not aware of issuance of the notice and the documents related to the disputed transactions were not furnished to them. In such circumstances, this Court is of the view that the impugned order came to be passed, without affording an opportunity of personal hearing to the petitioner to establish their case, thereby violating the principles of natural justice and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law. The impugned order dated 31.12.2023 is set aside on condition that the petitioner deposits 20% of the disputed tax amount in respect of the impugned assessment period within a period of four weeks from the date of receipt of a copy of this order. This Writ Petition is allowed.

Issues:
1. Petition seeking issuance of Writ of Certiorari to quash order passed by 2nd respondent in GST matter.
2. Allegation of improper order by 2nd respondent without proper notice and opportunity to rectify.
3. Dispute over mismatch of liability in GSTR filings and excess claim of ITC leading to tax demand.
4. Respondent's contention of providing opportunities for objections and personal hearing.
5. Court's consideration of violation of principles of natural justice and need for petitioner to establish their case.

Analysis:
The Writ Petition was filed to challenge the order passed by the 2nd respondent in a GST matter. The petitioner, a registered partnership firm providing motor car services, alleged that the order of mismatch of liability in GSTR filings and excess claim of ITC was improper and illegal. The petitioner claimed that they were not served proper notice regarding the discrepancies and were not given an opportunity to rectify the same before the order was passed. The petitioner only became aware of the order when a recovery notice was issued, and by that time, the appeal period had expired. Thus, the petitioner sought to quash the order based on lack of opportunity to rectify the alleged discrepancies.

The Government Advocate representing the respondents contended that opportunities were provided to the petitioner to respond to the show cause notice, with reminders sent for objections and personal hearing. However, the petitioner failed to present their case despite the opportunities provided. The Government Advocate suggested that subject to the deposit of 20% of the disputed tax demand, the court could consider passing appropriate orders.

Upon hearing both parties and examining the records, the Court noted that while the respondents claimed to have issued three notices to the petitioner, the petitioner was unaware of these notices and had not been provided with the relevant documents related to the disputed transactions. The Court found that the impugned order was passed without affording the petitioner an opportunity for a personal hearing to establish their case, thus violating the principles of natural justice. Consequently, the Court set aside the order dated 31.12.2023 on the condition that the petitioner deposits 20% of the disputed tax amount within four weeks. The Assessing Officer was directed to fix a date for a personal hearing, consider the objections, and pass fresh orders in accordance with the law within four weeks from the deposit.

In conclusion, the Writ Petition was allowed, with no costs imposed, and the connected Miscellaneous Petition was closed. The judgment highlighted the importance of providing a fair opportunity for parties to present their case and emphasized the principles of natural justice in legal proceedings.

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