2023 (1) TMI 578 - HC - GST

Principles of natural justice - case is that no notice of hearing before passing the impugned order was issued to or received by the petitioning assessee - HELD THAT - Since the order impugned dated May 25, 2022 was founded on the basis that the assessee had due notice and knowledge of dates of hearing fixed but the assessee had failed to be represented in course thereof, and it now appears that the assessee may not have received any of the three notices said to have been issued by email in April, 2022, the order impugned may not have any legs to stand on. The Department maintains that the email address to which the three notices of April, 2022 were sent was furnished by an authorised representative of the assessee, but there is no document to indicate the same and it is submitted on behalf of the Department that such information was furnished verbally. The affidavit-in-reply filed by the assessee has robustly denied that the relevant email address to which the three notices of April, 2022 were issued belonged to the assesse or that such address had been furnished by any authorised officer of the assesse. It is apparent that the Department has failed to discharge the burden of proving that the notices for hearing had been served on the assessee for the assessee to be penalised for not availing of the opportunity of hearing. The order impugned dated May 25, 2022 was passed without hearing the assessee and without affording the assessee an opportunity of being heard. Since the nature of the order was such that the assessee s participation was necessary prior to the same being made, the order impugned dated May 25, 2022 is set aside and the position is set back to the stage of the show-cause notice - Petition allowed.

Summary

Issues:
- Entertaining a writ petition against an order passed by the Service Tax Department due to lack of notice of hearing to the petitioner.
- Dispute regarding the receipt of notices by the petitioner.
- Examination of whether the impugned order was passed in violation of natural justice principles.
- Setting aside the impugned order and reverting to the stage of the show-cause notice.
- Directing the Department to issue a reasonable notice for hearing to the petitioner.

Analysis:
1. The High Court entertained a writ petition challenging an order by the Service Tax Department due to the absence of a notice of hearing to the petitioner. The petitioner contended that no notice was received, leading to the court's decision to examine the matter despite the availability of an alternative remedy through appeal.

2. The respondent authorities filed an affidavit indicating that while the initial show-cause notice was received, subsequent notices were allegedly sent to an email address provided by the petitioner's representative. However, the petitioner denied receiving these notices, prompting the court to delve deeper into the issue.

3. The court highlighted that when an order is appealable but found to violate principles of natural justice, it may entertain a writ petition to address the deficiency. In this case, the court found that the impugned order, based on the assumption of notice to the petitioner, lacked a foundation due to the disputed receipt of emails containing notices.

4. As a consequence of the lack of proper notice and opportunity for the petitioner to be heard, the court set aside the impugned order and reverted the position back to the stage of the show-cause notice. The Department was directed to issue a reasonable notice for hearing to the petitioner within three weeks.

5. The writ petition succeeded in challenging the order based on procedural irregularities, emphasizing that the merits of the case were not delved into, leaving room for the Department to take appropriate steps in accordance with the law. The case was disposed of without any order as to costs, concluding the legal proceedings.