2022 (9) TMI 937 - HC - GST

Principles of natural justice - no personal hearing was given to the petitioner - non-speaking order - difference between the purchase and sale details - HELD THAT - On perusal of the materials, it is seen that the petitioner has filed this writ petition within a period of appeal. Further, the petitioner in his reply filed an annexure showing the difference of calculation. In the impugned order, there is no reason given for why the petitioner's calculation was not considered. The petitioner s submission in the show cause notice reply is that 'by a technical hitch'. The petitioner requires a personal hearing. Further, from the impugned order, it is seen that department has questioned the classification, which needs personal hearing and perusal of the documents and thereafter, detailed order to be passed. This Court finds that by cryptic non-speaking order, an impugned order cannot be passed. Hence, the impugned order is hereby set aside. The petitioner is to be given an opportunity for personal hearing and thereafter, on the documents submitted by the petitioner, the issue can be decided - Petition disposed off.

Issues:
1. Quashing of impugned order in Reference No.ZD330522010718P dated 23.05.2022 under the Goods and Service Tax Act.
2. Discrepancy between petitioner's filed returns GSTR-1 and GSTR-3B.
3. Lack of personal hearing and detailed reasoning in the impugned order.
4. Proper classification of goods and the need for a personal hearing.
5. Timely filing of the writ petition and the right to appeal under Section 107 of the GST Act.
6. Setting aside the impugned order and directing a personal hearing for the petitioner.

Analysis:
1. The petitioner sought to quash the impugned order in Reference No.ZD330522010718P dated 23.05.2022 under the Goods and Service Tax Act. The petitioner, a proprietor of Jothi agency, engaged in the purchase and retail sale of edible oil, filed monthly returns GSTR-1 and GSTR-3B. A notice was served citing a significant variance between the two returns. The petitioner responded, highlighting a discrepancy of Rs.3,26,721/-, contrary to the notice's claim of Rs.59,57,314/-. The petitioner argued for consideration of the enclosed purchase and sale details, emphasizing the lack of a personal hearing and the cryptic nature of the impugned order.

2. The respondents contended that the petitioner waived the option of a personal hearing in their reply to the show cause notice. They argued that the classification of goods was improper, with incorrect returns classification and missing details regarding specific products. The impugned order was defended based on these grounds. The respondents pointed out that the petitioner had the right to appeal under Section 107 of the GST Act within 90 days of the impugned order.

3. Upon review, the Court noted that the petitioner filed the writ petition within the appeal period and submitted a detailed annexure explaining the calculation differences. The Court criticized the lack of reasoning in the impugned order and emphasized the need for a personal hearing, especially concerning the classification issues raised by the department. It was deemed that a non-speaking order like the impugned one was insufficient, leading to its setting aside.

4. Consequently, the Court directed the petitioner to seek a personal hearing from the respondents within 30 days of receiving the order copy, with a mandate for the second respondent to conclude the show cause proceedings and issue appropriate orders. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed, ensuring the petitioner's right to a fair hearing and a reasoned decision based on submitted documents.

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