2024 (9) TMI 1479 - HC - GST

Demand of differential IGST and GST Compensation Cess along with interest and penalty on supply of goods to merchant exporter - Fulfilment of conditions of N/N. 41/2017-Integrated Tax (Rate) on supplies made to merchant exporter or not - benefit of concessional rate of tax - HELD THAT - As rightly contended by the learned counsel for the petitioner a perusal of the reply dated 29.2.2024 vide Annexure-L will indicate that the petitioner has specifically sought for an opportunity of personal hearing before the matter was adjudicated. Despite the specific request made by the petitioner for an opportunity of personal hearing the respondent has proceeded to pass the impugned order which is not only in violation of principles of natural justice but also contrary to Section 75 (4) of the CGSC Act warranting interference in the present petition. The impugned order at Annexure-A is hereby set aside - Matter is remitted back to the respondent for reconsideration afresh in accordance with law - Petition allowed by way of remand.

Summary

Issues:
Petition seeking writ of Certiorari to quash order demanding differential IGST and GST Compensation Cess. Allegation of lack of opportunity for personal hearing and violation of natural justice principles.

Analysis:
The petitioner sought relief through a writ petition to quash an order issued by respondent no. 2 demanding a significant amount along with interest and penalty. The petitioner contended fulfillment of conditions for a concessional tax rate under Notification No.41/2017-Integrated Tax (Rate) but was aggrieved by the lack of a proper opportunity for a personal hearing during the proceedings. The respondent issued various communications, including intimation of discrepancies and a show cause notice, to which the petitioner responded timely. However, despite the petitioner's request for a personal hearing, the impugned order was passed without granting this opportunity, leading to a violation of principles of natural justice and Section 75(4) of the CGSC Act, 2017.

The learned counsel for the petitioner argued that the specific request for a personal hearing was made evident in the petitioner's reply, emphasizing the importance of such a hearing before adjudication. The Court agreed with this contention, highlighting the violation of principles of natural justice and the statutory requirement of providing a personal hearing under Section 75(4) of the CGSC Act. Consequently, the Court allowed the petition, setting aside the impugned order and remitting the matter back to the respondent for reconsideration in accordance with the law. The Court directed the respondent to provide sufficient and reasonable opportunities to the petitioner, including a personal hearing, and instructed the petitioner to appear before the respondent without further notice. Additionally, the petitioner was granted liberty to submit additional pleadings and documents, with the requirement for the respondent to consider them adequately and proceed in accordance with the law.

In conclusion, the Court found merit in the petitioner's argument regarding the denial of a personal hearing, thereby violating principles of natural justice and statutory provisions. The judgment allowed the petition, nullifying the impugned order and instructing a reconsideration of the matter with proper opportunities for the petitioner, emphasizing adherence to legal procedures and principles of natural justice.