9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (4) TMI 1584 - HC - GSTValidity of summary order in Form GST DRC-07 - Seeking for issuance of Writ of Certiorarified Mandamus calling for the records on the file of the respondent and quash the same as illegal error of law and error on the face of record - denial of opportunity of being heard - violation of principles of natural justice - HELD THAT - The impugned summary order dated 20.12.2023 was passed calling upon the petitioner to file objections on or before 28.12.2023 while the impugned order was passed under Section 73 of the Act on 30.12.2023 which is not a consequential order or speaking order to the summary of the order in Form GST DRC 07 dated 07.12.2023. When such being the case this Court is of the view that the impugned order came to be passed without considering the objections which have to be made by the petitioner 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. The order impugned herein is set aside on condition that the petitioner deposits 25% of the disputed tax amount in respect of the impugned assessment period as agreed by the petitioner within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off.
The core legal questions considered by the Court in this matter include:
1. Whether the impugned order passed under Section 73 of the Goods and Services Tax Act, 2017 (GST Act) is legally sustainable, given the procedural irregularities alleged by the petitioner. 2. Whether the petitioner was denied the opportunity of being heard, in violation of principles of natural justice, due to non-service and non-uploading of statutory notices on the GST portal. 3. Whether the summary order in Form GST DRC-07 dated 07.12.2023 could be treated as a final or speaking order without considering the petitioner's objections. 4. Whether the petitioner's willingness to deposit 25% of the disputed tax demand can be a basis for the Court to grant relief and permit reconsideration of the impugned order. Issue-wise Detailed Analysis 1. Legality and Validity of the Impugned Order under Section 73 of the GST Act The legal framework governing this issue is Section 73 of the GST Act, which deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized. The procedure mandates issuance of show cause notices, opportunity for the assessee to file objections, and passing of a speaking order after considering such objections. Precedents emphasize the mandatory nature of adherence to procedural safeguards, including proper service of notices and opportunity of hearing, as essential components of natural justice. The Court noted that the impugned order dated 30.12.2023 was passed summarily without any speaking rationale and without considering the objections of the petitioner. The summary order in Form GST DRC-07 dated 07.12.2023 was not a consequential or speaking order but merely a call for objections. Passing a final order without hearing the petitioner was held to be a violation of the statutory procedure. The Court found that the impugned order suffers from an error of law and is unsustainable as it was passed without affording the petitioner an opportunity to be heard, thus violating principles of natural justice and statutory mandate. 2. Denial of Opportunity of Hearing due to Non-Service and Non-Uploading of Notices The petitioner contended that notices in Form GST-DRC-01A and Form ASMT 10 were neither uploaded on the GST portal nor served upon the petitioner, depriving them of the opportunity to file objections. The legal principle here is that proper service of notice is a precondition for valid proceedings under the GST Act, and failure to serve notice vitiates the entire process. The Court observed the petitioner's submissions that the notices were not available online and were not served, which prevented the petitioner from exercising their right to file objections. This procedural lapse was critical since the petitioner could not participate in the assessment proceedings effectively. The Court treated this procedural irregularity as a fundamental flaw, necessitating setting aside the impugned order to allow the petitioner to participate in the proceedings fully and fairly. 3. Effect of the Summary Order in Form GST DRC-07 and Requirement of a Speaking Order The summary order in Form GST DRC-07 dated 07.12.2023 merely called upon the petitioner to file objections by 28.12.2023. The impugned order dated 30.12.2023 was passed shortly thereafter without considering any objections or providing reasons. The Court emphasized that a summary order cannot substitute a speaking order required under the GST Act. The absence of a speaking order explaining the reasons for the tax demand and rejection of objections rendered the impugned order legally deficient. This failure to issue a reasoned order deprived the petitioner of the opportunity to understand the basis of the demand and to effectively challenge it, which is contrary to the principles of fair procedure. 4. Petitioner's Willingness to Deposit 25% of the Disputed Tax Demand and Court's Discretion The petitioner expressed readiness to deposit 25% of the disputed tax amount as a condition for reconsideration of the matter. The respondent also agreed that if the petitioner deposited this amount, the Court may consider passing appropriate orders. The Court exercised its discretion to condition the setting aside of the impugned order on the petitioner's deposit of 25% of the disputed tax within four weeks. This approach balances the revenue interest and the petitioner's right to be heard. Upon deposit, the petitioner was directed to file objections within two weeks, and the respondent was mandated to issue a 14-day clear notice fixing a date for personal hearing before passing a reasoned order on merits. This procedure ensures compliance with statutory requirements and principles of natural justice, providing a fair opportunity to the petitioner to substantiate their case. Treatment of Competing Arguments The petitioner argued primarily on procedural grounds, emphasizing non-service of notices and denial of hearing. The respondent did not dispute these procedural lapses but sought to condition relief on partial deposit of the disputed tax amount. The Court accepted the petitioner's contentions regarding procedural irregularities and balanced them with the respondent's concerns by imposing the deposit condition, thus ensuring equitable treatment of both parties. Conclusions The Court concluded that the impugned order dated 30.12.2023 is illegal and unsustainable as it was passed without following the mandatory procedure under the GST Act and without affording the petitioner an opportunity to be heard. Accordingly, the Court set aside the impugned order on the condition of deposit of 25% of the disputed tax amount and directed fresh proceedings in accordance with law and principles of natural justice. Significant Holdings The Court held: "The impugned order came to be passed without considering the objections which have to be made by the petitioner 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." Core principles established include:
Final determinations on each issue were that the impugned order is quashed, the petitioner must deposit 25% of the disputed tax, file objections, and be afforded personal hearing before fresh orders are passed.
|
