2024 (8) TMI 1459 - HC - GST

Violation of principles of natural justice - petitioner was not given any opportunity of hearing and in the column meant for mentioning the date, place and time of personal hearing the term NA (not applicable) was mentioned - HELD THAT - Initially, the notice under Section 61 was issued to the petitioner. The petitioner did not file any reply to the said notice. Later on notice under Section 73 was issued indicating that there was discrepancy in the GST return with regard to turn over as disclosed by the petitioner and to show cause as to why proceedings be not initiated against him. The petitioner neither filed any reply nor did he seek time to file a reply nor prayed for adjournment of hearing. The petitioner even did not think it proper to seek personal hearing in the matter as no reply at all was submitted and notice under Section 73 was ignored. It is not disputed by the petitioner that he did not choose to reply either to notice under Section 61 or to the notice under Section 73. When a show cause notice is issued the normal reaction of a businessman is to submit a reply and ask for a personal hearing. In case reply cannot be submitted in time such assessee can ask for extension of time indicating the difficulty that he faces in submitting and reply in time. Nothing was done by the assessee. He chose to ignore the show cause notice when opportunity of hearing was given, no interference in the procedure followed by the respondents is warranted in the writ jurisdiction. Petition disposed off.

Summary

Issues:
Violation of natural justice in issuance of notice under Section 73 of GST Act, 2017.

Analysis:
The petitioner filed a petition seeking to quash an order dated 18.04.2024 passed by the Deputy Commissioner, Raebareli Sector, Lucknow. The petitioner argued that the notice issued to him on 30.11.2023 and 23.01.2024 did not provide an opportunity for a hearing as required under Section 75(4) of the GST Act, 2017. The petitioner claimed that the order was unjust and should be set aside. The Standing Counsel presented instructions showing that the petitioner had discrepancies in his GST return and had not responded to the notices issued under Sections 61 and 73 of the Act. The assessing officer imposed a tax liability of Rs. 68,53,320/- with interest and penalty. The petitioner's counsel contended that while the petitioner could appeal under Section 107 of the Act, there was a failure on the respondents' part to adhere to the principles of natural justice by not providing a personal hearing in the notice issued under Section 73.

The Court noted that the petitioner had not responded to the notices under Sections 61 and 73 nor requested an extension of time or a personal hearing. The Court emphasized that when a show cause notice is issued, it is expected that the recipient, especially a businessman, would reply and seek a hearing. The Court opined that since the petitioner did not avail the opportunity for a hearing, there was no basis to interfere with the procedure followed by the respondents. The Court directed the petitioner to pursue the statutory remedy available under Section 107 of the GST Act, disposing of the petition accordingly. The Court also recorded the appearance of the opposite party and retained the instructions on record for reference.

This judgment underscores the importance of complying with the principles of natural justice in administrative proceedings, particularly in matters concerning taxation. It highlights the significance of availing statutory remedies provided under the law and the consequences of failing to engage with the legal process effectively.