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2024 (11) TMI 331 - HC - GSTViolation of principles of natural justice - service of notices/communications - petitioner was not aware of the notices, and they failed to file their reply within the time - HELD THAT - In the case on hand, as per the proviso to Rule 86B of the GST Rules, the petitioner is not liable to pay any tax amount. However, the petitioner, being unaware of the show cause notice, had failed to appear for personal hearing before the 1st respondent. In such case, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Therefore, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits. The impugned order dated 26.03.2024 is set aside and the matter is remanded to the 1st respondent for fresh consideration - Petition allowed by way of remand.
Issues:
1. Challenge to impugned order dated 26.03.2024 passed by the 1st respondent under Rule 86B of the TNGST Act. 2. Failure to provide an opportunity of personal hearing to the petitioner before passing the impugned order. 3. Request to lift the bank attachment and de-freeze the bank account of the petitioner. 4. Request for remittance of the matter back to the respondent subject to payment of 10% of the disputed amount by the petitioner. 5. Interpretation of the exception carved out in Clause (a) of proviso to Rule 86B of the GST Rules. Detailed Analysis: 1. The writ petition challenges the order passed by the 1st respondent under Rule 86B of the TNGST Act. The petitioner argued that due to paying income tax exceeding Rs. 1,00,000, they were entitled to avail 100% of the Input Tax Credit (ITC) instead of the usual 99%. The petitioner contended that the respondent uploaded notices on the GST portal without providing an opportunity for a personal hearing, leading to the filing of the petition. 2. The petitioner claimed that they were not aware of the notices uploaded on the GST portal, which resulted in their failure to respond within the stipulated time. The absence of a personal hearing before passing the impugned order was highlighted as a violation of natural justice. The Court acknowledged the lack of opportunity for the petitioner to present their case and set aside the impugned order, emphasizing the importance of providing a fair hearing. 3. The petitioner requested the Court to lift the bank attachment and de-freeze their bank account, which was issued by the 1st respondent. The Court, upon setting aside the impugned order, directed the immediate release of the bank attachment and the de-freezing of the petitioner's bank account upon the production of a copy of the order. 4. The Additional Government Pleader for the 1st respondent requested the Court to remit the matter back to the respondent, subject to the petitioner paying 10% of the disputed amount. However, the Court did not mention any specific order regarding this request in the judgment. 5. The interpretation of the exception in Clause (a) of the proviso to Rule 86B of the GST Rules was discussed, with the petitioner arguing that they were not liable to pay any tax amount based on this exception. The Court did not delve into a detailed analysis of this argument but emphasized the need for the petitioner to have an opportunity to explain their case before the respondent.
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