2024 (9) TMI 45 - HC - GST

Violation of principles of natural justice - impugned orders were merely uploaded to the GST Dashboard under ''View Notice and Orders'' and ''View Additional Notices and Orders'' tabs in the GST Portal - petitioner was not aware of the notices being uploaded in the GST Portal - HELD THAT - The impugned orders came to be passed against the petitioner, behind their back, as the respondent-Department has not taken any steps to serve any notices/communications, particularly, show cause notice/notice of personal hearing to the petitioner directly through physical mode of service and made it available only in the GST Portal, hence, the petitioner, was not aware of any such notices, and only when the respondent contacted the petitioner over phone, and intimated about the tax dues pursuant to the order passed during June, 2024, the petitioner became aware; and the petitioner, being a small concern, obviously, there wouldn't have been any occasion for them to view the GST Portal then and there. It is found that, in the instant case, the petitioner has not been heard before passing the impugned orders and this is sufficient to hold that the impugned orders are nothing but ex parte orders, which are unsustainable in the eye of law and the notices/communications, which were merely uploaded to the GST Dashboard under ''View Notice and Orders'' and ''View Additional Notices and Orders'' tabs in the GST Portal, can no longer be deemed to be a sufficient service. This Court is inclined to set aside the impugned order dated 31.10.2023 and the consequential demand order dated 01.11.2023, as the same suffers from violation of principles of natural justice and any such order came to be passed against an Assessee (petitioner in this case) without providing any opportunity of personal hearing and filing reply is directly hit by Articles 14 and 19 (1) (g) of the Constitution of India - The matter is remanded back to the first respondent for fresh consideration. Petition allowed by way of remand.

Summary

Issues:
Challenge to order dated 31.10.2023 and consequential demand order dated 01.11.2023 based on violation of principles of natural justice.

Analysis:
The petitioner, a Partnership Firm, contested an order by the first respondent regarding Input Tax Credit claimed during the Financial Year 2017-18. The petitioner alleged that they were unaware of notices uploaded on the GST Portal, leading to failure in responding to the differences in GSTR-3B and GSTR-2A until informed over the phone and through a letter about tax dues and bank account attachment. The petitioner argued that the impugned orders violated principles of natural justice by not providing an opportunity for a personal hearing. The petitioner expressed willingness to pay 10% of the disputed tax if the bank attachment was lifted. The Government Advocate for the first respondent agreed to consider the petitioner's offer.

Upon review, the Court found that the impugned orders were passed against the petitioner without affording them an opportunity to be heard, constituting ex parte orders. The Court determined that the notices uploaded on the GST Portal did not constitute sufficient service, especially for a small concern like the petitioner. Consequently, the Court held that the impugned orders were unsustainable in law due to the violation of principles of natural justice and the petitioner's constitutional rights under Articles 14 and 19(1)(g) of the Indian Constitution.

As a result, the Court set aside the order dated 31.10.2023 and the consequential demand order dated 01.11.2023, remanding the matter back to the first respondent for fresh consideration. The petitioner was directed to deposit 10% of the disputed tax within four weeks, file a reply within two weeks, and be provided with a personal hearing before any further orders were issued. The Court also directed the Bank to transfer 10% of the disputed tax amount to the respondent-Department upon the petitioner's request, revoking the bank account freeze order.

Ultimately, the Writ Petition was allowed on the specified terms, with no costs imposed. The connected Miscellaneous Petitions were accordingly ordered and closed.