2024 (11) TMI 1397 - HC - GST

Violation of principles of natural justice - non-service of notices - petitioner came to know about the impugned order from the third respondent/Bank on account of the recovery proceedings inititated against the petitioner for non-filing of GST returns - HELD THAT - It is evident that the impugned show cause notices were uploaded on the GST Portal Tab. According to the petitioner, the petitioner was not aware of the issuance of the show cause notices issued through the GST Portal and the original of the said show cause notices were not furnished to them. In such circumstances, this Court is of the view that the impugned order came to be passed without affording any opportunity of personal hearing to the petitioner to establish its case, thereby violating the principles of natural justice and that it is just and necessary to provide an opportunity to the petitioner to establish their case on merits and in accordance with law. This Court is inclined to set aside the impugned orders dated 13.12.2023 passed by the second respondent and the consequential Provisional Attachment order dated 05.06.2024 passed by the first respondent - The orders impugned herein are set aside on condition that the petitioner deposits 10% of the disputed tax amount in respect of the assessment year in question within a period of four weeks from the date of receipt of a copy of this order. Petition allowed.

Summary

Issues:
Violation of principles of natural justice in passing impugned orders without affording an opportunity for a personal hearing.

Analysis:
The judgment concerns two writ petitions with identical issues and relief sought, which were heard together and disposed of via a common order. The petitioner had received notices through the GST portal, which he was unaware of, leading to the passing of an impugned order without any response from the petitioner. The petitioner only became aware of the order when the bank initiated recovery proceedings due to non-filing of GST returns. The petitioner requested an opportunity to substantiate his case and agreed to pay 10% of the disputed tax. The Government Advocate suggested that the matter could be remanded if the petitioner deposited the 10% disputed tax. The court observed that the impugned order was passed without affording the petitioner a personal hearing, violating principles of natural justice. As a result, the court set aside the impugned orders and the provisional attachment order, providing specific directions.

The court found that the impugned show cause notices were uploaded on the GST portal, but the petitioner was unaware of them, as the original notices were not provided. The court concluded that the impugned orders were passed without giving the petitioner an opportunity for a personal hearing to establish their case, thus violating principles of natural justice. Consequently, the court decided to set aside the impugned orders and the provisional attachment order. The court ordered the petitioner to deposit 10% of the disputed tax within four weeks, file a reply within two weeks thereafter, and directed the respondents to issue a clear notice for a personal hearing. Additionally, the court ordered the bank to defreeze the petitioner's account if it was attached.

In summary, the court's decision was based on the violation of natural justice principles in passing the impugned orders without a personal hearing for the petitioner. The court set aside the orders, provided specific conditions for the petitioner, and directed the respondents to conduct a hearing and pass appropriate orders in accordance with the law.