2025 (3) TMI 1127 - HC - GST

Attachment of petitioner s bank property - Due service of pre-intimation notice and SCN under the CGST/KGST Act 2017 - Failure to respond to the notices - time limitation - HELD THAT - Having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to bona fide reasons unavoidable circumstances and sufficient cause it is deemed just and appropriate to adopt a justice oriented approach and provide one more opportunity to the petitioner by setting aside the impugned order dated 08.11.2023 and remitting the matter back to the first respondent for reconsideration of the matter afresh in accordance with law to the stage of petitioner submitting reply to the impugned show-cause notice by imposing cost of Rs.10, 000/- on the petitioner payable to the High Court Advocate Welfare Fund. The matter is remitted back to the first respondent for reconsideration afresh in accordance with law - petition alowed by way of remand.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the petitioner was duly notified of the pre-intimation notice and show-cause notice under the CGST/KGST Act, 2017, and whether the failure to respond to these notices justifies the ex-parte order passed against him.
Whether the petitioner's appeal was rightfully dismissed as barred by limitation due to the alleged lack of notice.
Whether the provisions of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017 are unconstitutional and violate Articles 14, 19, and 300A of the Constitution of India.
What relief, if any, is the petitioner entitled to under the circumstances?

ISSUE-WISE DETAILED ANALYSIS

1. Notification and Service of Notices

Relevant Legal Framework and Precedents: The CGST/KGST Act, 2017, and related rules require that notices be communicated to the concerned parties, typically through electronic means such as uploading on the GST portal or via email.
Court's Interpretation and Reasoning: The Court acknowledged the petitioner's claim that he did not receive the notices, but it also considered the respondents' assertion that the notices were duly communicated electronically.
Key Evidence and Findings: The petitioner did not submit replies to the notices, which led to an ex-parte order. The Court noted the absence of evidence from the petitioner contesting the electronic communication of notices.
Application of Law to Facts: The Court found that despite the electronic communication, the petitioner's failure to respond was due to bona fide reasons and unavoidable circumstances.
Treatment of Competing Arguments: The Court balanced the petitioner's claim of non-receipt against the respondents' evidence of electronic communication, ultimately favoring a justice-oriented approach.
Conclusions: The Court decided to set aside the ex-parte order and provide the petitioner another opportunity to respond, subject to certain conditions.

2. Dismissal of Appeal as Barred by Limitation

Relevant Legal Framework and Precedents: The appeal process under the CGST/KGST Act is subject to strict timelines, and appeals can be dismissed if filed beyond the prescribed period.
Court's Interpretation and Reasoning: The Court recognized that the appeal was dismissed due to being filed late, but it considered the petitioner's argument regarding lack of notice.
Key Evidence and Findings: The appeal was indeed filed after the deadline, but the petitioner claimed this was due to not being aware of the proceedings.
Application of Law to Facts: The Court found that the petitioner's delay in filing the appeal was excusable under the circumstances.
Treatment of Competing Arguments: The Court weighed the procedural requirement of timely appeals against the petitioner's claim of lack of notice, opting for leniency.
Conclusions: The Court allowed the petitioner another opportunity to contest the proceedings, effectively granting relief from the dismissal of the appeal.

3. Constitutionality of Section 16(2)(c) of the CGST/KGST Act

Relevant Legal Framework and Precedents: Section 16(2)(c) of the CGST/KGST Act pertains to the conditions for availing Input Tax Credit, and its constitutionality can be challenged under Articles 14, 19, and 300A.
Court's Interpretation and Reasoning: The judgment did not provide a detailed analysis of this issue, as the primary focus was on procedural fairness and the opportunity for the petitioner to respond to the notices.
Key Evidence and Findings: The petitioner's constitutional challenge was noted but not addressed substantively in the judgment.
Application of Law to Facts: The Court did not apply constitutional principles to this issue, as it focused on procedural aspects.
Treatment of Competing Arguments: The Court did not delve into arguments regarding the constitutionality of the provisions.
Conclusions: The issue of constitutionality was not resolved in this judgment.

SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning: The Court emphasized a "justice-oriented approach" and provided the petitioner another opportunity to contest the proceedings, stating, "having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice-oriented approach."
Core Principles Established: The principle of providing a fair opportunity to be heard, especially in cases where procedural lapses may have occurred, was reinforced.
Final Determinations on Each Issue: The Court set aside the impugned order dated 08.11.2023 and remitted the matter back to the first respondent for reconsideration, allowing the petitioner to submit replies and documents, subject to the condition of depositing Rs. 10,000/- to the High Court Advocate Welfare Fund.

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