2025 (3) TMI 553 - HC - GST

Violation of principles of natural justice - failure to acknowledge the petitioner s response to the show cause notice - opportunity for personal hearing denied - HELD THAT - Once the reply to the show cause notice was filed the indication made in the order impugned that no reply has been filed and various pleas which were taken in reply to the show cause notice have not been considered clearly shows non application of mind to the record of the case. So far as issuance of notice for personal hearing is concerned the material placed on record (Annexure - 3 4 to the petition) clearly indicates that the details of authorized signatories are different from the e-mail address on which the notices for personal hearing had been sent and therefore sending of notices on e-mail address which was abandoned and changed under intimation to the respondents cannot be used by the respondents to indicate that despite notices for personal hearing the petitioner did not appear. It is apparent that the order impugned dated 15.01.2025 has been passed without considering the response to the show cause notice which was already on record and without affording opportunity of personal hearing and as such the same cannot be sustained. Conclusion - Once the reply to the show cause notice was filed the indication made in the order impugned that no reply has been filed and various pleas which were taken in reply to the show cause notice have not been considered clearly shows non application of mind to the record of the case. The order impugned dated 15.01.2025 and demand raised based on the said order are quashed and set aside. The matter is remanded back to the respondent authority to afford opportunity of personal hearing to the petitioner and pass appropriate order in accordance with law - petition allowed by way of remand.

ISSUES PRESENTED and CONSIDERED

The primary legal issues considered in this judgment are:

Whether the order dated 15.01.2025 passed by the Additional Commissioner, CGST, was valid given the alleged procedural deficiencies, including the failure to acknowledge the petitioner's response to the show cause notice and the lack of proper notification for a personal hearing.
Whether the petitioner was denied a fair opportunity to present its case due to the procedural lapses in the issuance of notices for personal hearings.

ISSUE-WISE DETAILED ANALYSIS

1. Validity of the Order Dated 15.01.2025

Relevant Legal Framework and Precedents: The order was issued under Section 74 of the C.G.S.T. Act, 2017, which deals with the determination of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts.
Court's Interpretation and Reasoning: The Court noted that the order was passed without considering the petitioner's response to the show cause notice, which was acknowledged as filed on 30.08.2024. The Court found that this demonstrated a non-application of mind to the record of the case by the adjudicating authority.
Key Evidence and Findings: The acknowledgment of the reply to the show cause notice, submitted as Annexure-6, was crucial evidence indicating that the petitioner's response was indeed filed, contrary to the claims in the impugned order.
Application of Law to Facts: The Court applied the principles of natural justice, emphasizing the necessity for the adjudicating authority to consider all submissions made by the petitioner before passing an order.
Treatment of Competing Arguments: The respondents argued that notices for personal hearings were issued and uploaded to the petitioner's email address. However, the Court found that these notices were sent to an outdated email address, which had been changed with due intimation to the respondents.
Conclusions: The Court concluded that the order was passed without due consideration of the petitioner's response and without providing a fair opportunity for a personal hearing, rendering the order unsustainable.

2. Denial of Fair Opportunity Due to Procedural Lapses

Relevant Legal Framework and Precedents: The principles of natural justice require that a party be given a fair opportunity to present their case, which includes proper notification of hearings.
Court's Interpretation and Reasoning: The Court determined that the failure to notify the petitioner at the correct email address, despite having updated contact information, constituted a denial of the opportunity to be heard.
Key Evidence and Findings: The material on record, including Annexures-3 and 4, demonstrated the discrepancy in the email address used for communication, supporting the petitioner's claim of not receiving proper notice.
Application of Law to Facts: The Court applied the doctrine of audi alteram partem, which mandates that no person should be judged without a fair hearing, to the facts of the case.
Treatment of Competing Arguments: The respondents maintained that multiple opportunities for personal hearings were provided. However, the Court found that the notifications were not sent to the correct email address, undermining this argument.
Conclusions: The Court concluded that the procedural lapses in notifying the petitioner invalidated the process, warranting the quashing of the order.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: The Court observed, "Once the reply to the show cause notice was filed, the indication made in the order impugned that no reply has been filed and various pleas, which were taken in reply to the show cause notice have not been considered, clearly shows non application of mind to the record of the case."
Core Principles Established: The judgment reinforces the principles of natural justice, particularly the right to a fair hearing and the obligation of authorities to consider all relevant submissions before making a determination.
Final Determinations on Each Issue: The Court set aside the impugned order dated 15.01.2025 and the demand raised based on it, remanding the matter back to the respondent authority to provide an opportunity for a personal hearing and to pass an appropriate order in accordance with the law.