2024 (8) TMI 1312 - HC - GST

Violation of principles of natural justice - none of the notices, that are said to have been sent by the 3rd respondent, had been received by the petitioner and as such the petitioner had no notice of any of the proceedings - HELD THAT - The admitted fact is that the registration of the petitioner had been cancelled on 21.02.2019 and all proceedings resulting in the impugned orders had commenced only after the said cancellation of registration. It may also be noted that the registration had been cancelled on the ground that the petitioner was not filing GST returns. These facts coupled with the fact that the physical notices sent to the petitioner being returned with the noting Left should have been sufficient for the 3rd respondent to take steps to ascertain the whereabouts of the petitioner and to serve notices at such address. Though it cannot be said that service of notice on the petitioner by way of the E-Mail ID has not been done, the fact remains that the cancellation of the registration could have resulted in the petitioner not looking into the mails sent to the E-Mail ID which was registered with the department. In view of the fact that the petitioner is now aware of the order passed by the 3rd respondent, the present proceedings shall be treated as notice of the pending assessment before the 3rd respondent and the show cause notice dated 22.04.2022 as well as the impugned order dated 21.12.2022 shall be treated as show cause notices and the petitioner is granted three (03) weeks time to file his response to these notices. It would only be appropriate to give an opportunity to the petitioner to set out his case. Accordingly, the Writ Petition is allowed, setting aside the order of the 3rd respondent dated 21.12.2022 and remanding it back to the 3rd respondent for adjudication.

Summary

Issues:
Violation of principles of natural justice in tax assessment proceedings.

Analysis:
The petitioner, a registered dealer under the CGST Act, had their registration cancelled, leading to tax assessment for the period from October 2017 to March 2019. Despite notices sent via email, physical notices for personal hearing were returned, indicating lack of response. The tax authority proceeded with assessment and confirmed a demand of Rs. 46,77,312. The petitioner challenged the order, alleging violation of natural justice due to non-receipt of physical notices.

The court considered the contention of non-receipt of physical notices by the petitioner and the argument that notices sent to the registered email were sufficient. The cancellation of registration and returned physical notices should have prompted the tax authority to ensure proper service. The court noted the ambiguity and granted the petitioner an opportunity to present their case. The impugned order was set aside, and the matter was remanded for adjudication by the tax authority.

The court deemed the present proceedings as notice to the petitioner, allowing them three weeks to respond to the show cause notices. A personal hearing was scheduled, with provisions for seeking additional time if needed. The petitioner was required to pay 10% of the disputed tax before filing objections due to the belated approach to the court. No costs were awarded, and pending interlocutory applications were closed as a result of the judgment.