2024 (10) TMI 445 - HC - GST

Recovery of inadmissible income tax return with interest and penalty - Challenge against the order of adjudication - non-application of mind in the adjudication order - principles of natural justice - HELD THAT - It requires to be seen as to whether the order is an outcome of non-application of mind and whether the order has not taken into consideration the documents which ought to have considered. These issues ought to have been decided in the writ petition, however, the writ petition has been dismissed solely on the ground of availability of alternate remedy. The preliminary ground raised by the assessee in challenging the adjudication order would not involve adjudication into facts and because all that the writ court can go into is as to what effect of the earlier order dated 03.07.2018 and subsequent proceeding can be drawn on the same set of facts. Therefore, the writ petition should be heard afresh after affidavit-in-opposition is filed by the Department. The writ petition is restored to its original file and number before the learned Single Judge. The appropriate respondent shall file their affidavit-in-opposition within a period of six weeks from date - Appeal allowed.

Summary

Issues:
1. Delay in filing the appeal.
2. Challenge against the order of adjudication.
3. Non-application of mind in the adjudication order.

Analysis:
1. The High Court of Calcutta addressed a delay of 107 days in filing the appeal and allowed the application, condoning the delay due to sufficient grounds provided by the appellant. The Court disposed of the application and allowed the appeal to proceed despite the delay.
2. The appeal was filed against an order passed by the CGST & CX Kolkata North Commissionerate, challenging the adjudication order dated 02.11.2023. The appellant contended that the Department had already passed an order on the same issue on 03.07.2018, determining the eligible TRAN-1 Credit for the petitioner. Despite the petitioner's compliance with the previous order, subsequent notices and a show cause-cum-demand notice were issued, leading to the writ petition. The Court noted that the adjudicating authority did not consider the previous order's effect, raising concerns about non-application of mind in the decision.
3. The Court emphasized the need to examine whether the adjudication order was a result of non-application of mind and whether relevant documents were overlooked. The writ petition challenging the order was dismissed based on the availability of an alternate remedy, without delving into the critical issues raised by the appellant regarding the previous order's impact on the current proceedings. The Court decided to set aside the previous order, restore the writ petition, and directed the Department to file an affidavit-in-opposition. The writ petition was scheduled for rehearing, allowing both parties to present their arguments comprehensively.
4. In conclusion, the Court allowed the appeal, set aside the previous order, and directed the Department not to take coercive action against the appellant for recovery. Any connected applications were also allowed in light of the judgment, ensuring a fair and thorough reconsideration of the issues raised in the appeal.