2021 (9) TMI 830 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - Violation of principles of natural justice - adjudication order has been passed without prior service of show cause notice - non-speaking order - actionable material to proceed against the petitioner or not - HELD THAT - The impugned order only records the conclusion of the adjudicating authority without either discussing the facts or affording reasons for the conclusion reached - Therefore, notwithstanding prior to service of notice as claimed by the revenue authority, the impugned order has been passed in violation of essential principle of natural justice. In such facts, no useful purpose would be served in relegating the petitioner to the forum of alternative remedy - the matter is remitted back to the assessing authority to pass a fresh order, strictly in accordance with law, within a period of six months from today after affording due opportunity of hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenge to order passed under Section 74 of the GST Act, 2017 for the tax period 2019-20 without prior service of show cause notice, non-speaking order, lack of actionable material, violation of natural justice.

Analysis:

1. Lack of Prior Service of Show Cause Notice:
The petitioner contended that the order was passed without prior service of show cause notice. The impugned order was found to lack essential reasoning and discussion of facts, violating the principles of natural justice. The court held that passing an order without discussing facts or providing reasons is against the principles of natural justice, irrespective of the revenue authority's claim of serving the notice before. The lack of proper reasoning rendered the order unsustainable, leading to setting aside of the order.

2. Non-Speaking Order:
The order in question was deemed non-speaking as it merely recorded the conclusion without any discussion of facts or reasons for the decision. The court emphasized that an adjudicating authority must provide a reasoned order with proper discussion of facts and legal basis for the conclusion reached. The absence of such reasoning led to the order being set aside and remitted back for a fresh order by the assessing authority.

3. Lack of Actionable Material:
The petitioner argued that there was no actionable material to proceed against them, highlighting that the selling dealer was duly registered on the GST Portal. While the revenue authority raised a preliminary objection regarding the alternative remedy, it was acknowledged that the impugned order lacked proper reasoning. The court directed the adjudicating authority to draw a proper conclusion after providing due opportunity of hearing to the petitioner, indicating that the lack of actionable material was a significant factor in setting aside the order.

In conclusion, the High Court set aside the order passed by the Assistant Commissioner and remitted the matter back to the assessing authority for a fresh order within six months, emphasizing the importance of adhering to principles of natural justice, providing reasoned orders, and ensuring due opportunity of hearing to the concerned parties.