2022 (6) TMI 466 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - Violation of principles of natural justice - opportunity of being heard provided or not - HELD THAT - The merits of the matter are not entertained but it is convincing that the arguments made by the learned counsel for the appellant that there has been violation of principles of natural justice. It is because of the fact that the appellant has been granted seven days time to submit its reply to the show cause notice dated 27.03.2022. The appellant s case is that they were not communicated with the same on 27.03.2022 but received the same only on 29.03.2022. Even going by the date of the show cause notice dated 27.03.2022, the appellant had time to submit its reply on or before 02.04.2022. However, the impugned order was passed on 31.03.2022 i.e. before the stipulated time limit. When an opportunity is given to show cause it should be an effective opportunity and not an empty formality. The interest of the revenue has been sufficiently safeguarded as the goods have been released on furnishing of bank guarantee and bond. Therefore, adequate opportunity should be granted to the appellant and thereafter the authority should take a decision in the matter. Appeal allowed.

Summary

Issues:
Violation of principles of natural justice in passing the order dated 31.03.2022 under Section 129(3) of the GST Acts.

Analysis:
The High Court of Calcutta, comprising Hon'ble Justice T.S. Sivagnanam and Hon'ble Justice Hiranmay Bhattacharyya, heard an intra court appeal challenging an order dated 07.04.2022 passed in WPA 6146 of 2022. The appellant contended that the order dated 31.03.2022 under Section 129(3) of the GST Acts violated principles of natural justice. The Single Judge had dismissed the writ petition, directing the appellant to avail alternative remedy. The appellant argued that there was a violation of natural justice as they were granted seven days to reply to a show cause notice dated 27.03.2022, received late on 29.03.2022. The impugned order was issued on 31.03.2022, before the stipulated time limit, referencing objections filed by the appellant, which the appellant denied, stating it was a preliminary explanation letter. The Court found merit in the appellant's argument and set aside the order dated 31.03.2022.

The Court emphasized that when an opportunity is given to show cause, it must be effective and not a mere formality. It noted that the revenue's interest was safeguarded by the release of goods upon furnishing a bank guarantee and bond. Therefore, the Court concluded that the appellant should be granted adequate opportunity to present their case, and the authority should decide accordingly. Consequently, the order passed in the writ petition and the order dated 31.03.2022 were set aside. The appellant was directed to treat the order dated 31.03.2022 as a show cause notice and submit objections/reply within ten days. The authority was instructed to provide a personal hearing to the appellant's representative and pass a fresh order based on merit and in accordance with the law. The bank guarantee was to be maintained until the authority's decision. The appeal was allowed, and the connected application was disposed of accordingly.