2025 (1) TMI 777 - HC - GST

Violation of principles of natural justice - petitioner was adequately notified of the proceedings and given a fair opportunity to respond or not - petitioner is ready and willing to pay 10% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Government Advocate appearing for the respondent does not have any serious objection. HELD THAT - The petitioner shall deposit 10% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order - The impugned order dated 28.08.2024 is set aside - petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

• Whether the impugned order dated 28.08.2024 was passed in violation of the principles of natural justice?
• Whether the petitioner was adequately notified of the proceedings and given a fair opportunity to respond?
• What are the appropriate remedies for the alleged procedural deficiencies in the adjudication process?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Violation of Principles of Natural Justice

• Relevant Legal Framework and Precedents: The principles of natural justice require that a party be given a fair opportunity to present their case. The petitioner cited a precedent where similar circumstances led to a remand for reconsideration, subject to certain conditions.
• Court's Interpretation and Reasoning: The court recognized that the petitioner was not properly served with the show cause notices, as they were uploaded on the GST Portal without direct notification via Registered Post Acknowledgment Due (RPAD) until the final notice. This lack of proper service impeded the petitioner's ability to participate in the adjudication process.
• Key Evidence and Findings: The petitioner did not respond to the initial notices as they were unaware of them due to improper service. The subsequent notice was served via RPAD only six days before the impugned order was passed, which was insufficient time for the petitioner to prepare a response.
• Application of Law to Facts: The court applied the principles of natural justice to determine that the petitioner was denied a fair opportunity to present their case due to inadequate notice and insufficient time to respond.
• Treatment of Competing Arguments: The respondent did not strongly oppose the petitioner's request for a remand, indicating an acknowledgment of procedural deficiencies.
• Conclusions: The court concluded that the impugned order was passed in violation of the principles of natural justice, necessitating a remand for reconsideration.

Issue 2: Adequate Notification and Fair Opportunity

• Relevant Legal Framework and Precedents: Proper service of notices is a fundamental requirement under administrative law to ensure that parties are aware of proceedings and have an opportunity to respond.
• Court's Interpretation and Reasoning: The court found that the method of service through the GST Portal did not meet the requirements for adequate notification, as the petitioner was not aware of the proceedings until the final notice was served via RPAD.
• Key Evidence and Findings: The petitioner received the final notice only six days before the order was passed, which was deemed insufficient for preparing a response.
• Application of Law to Facts: The court determined that the petitioner was not given a fair opportunity to respond due to the inadequate and late notification of the proceedings.
• Treatment of Competing Arguments: The respondent's lack of serious objection to the petitioner's request for a remand supported the court's finding of inadequate notification.
• Conclusions: The court concluded that the petitioner was not adequately notified and thus denied a fair opportunity to participate in the proceedings.

Issue 3: Appropriate Remedies

• Relevant Legal Framework and Precedents: In situations where procedural deficiencies are identified, courts may set aside orders and remand cases for reconsideration, often with conditions to ensure compliance and fairness.
• Court's Interpretation and Reasoning: The court decided to set aside the impugned order and remand the matter for reconsideration, subject to the petitioner depositing 10% of the disputed taxes.
• Key Evidence and Findings: The petitioner expressed willingness to deposit 10% of the disputed taxes, and the respondent did not object to this condition.
• Application of Law to Facts: The court applied the precedent of remanding cases with conditions to ensure procedural fairness and compliance with tax obligations.
• Treatment of Competing Arguments: The respondent's agreement to the proposed remedy facilitated the court's decision to remand the case with conditions.
• Conclusions: The court concluded that setting aside the impugned order and remanding the case with conditions was the appropriate remedy to address the procedural deficiencies.

3. SIGNIFICANT HOLDINGS

• Verbatim Quotes of Crucial Legal Reasoning: "The impugned order dated 28.08.2024 is set aside" and "The petitioner shall deposit 10% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent."
• Core Principles Established: The judgment reinforces the necessity of adhering to the principles of natural justice by ensuring adequate notification and fair opportunity for parties to respond in administrative proceedings.
• Final Determinations on Each Issue: The court set aside the impugned order, required the petitioner to deposit 10% of the disputed taxes, and remanded the case for reconsideration with specific conditions to ensure compliance and fairness.