2023 (1) TMI 980 - HC - GST

Seeking direction upon the respondents to complete the investigation, which has been caused against the appellant - terming the appellant as a risky exporter and a tag being fixed - export consignments of the appellant are either not being allowed to be exported or there is inordinate delay on the alleged ground of verification - HELD THAT - The risky exporter tag cannot be indefinitely put on valid and precisely for this reason, the Central Board has issued Circular No. 131/1/2020-GST dated 23rd January, 2020 by which strict timelines have been fixed for the authorities to take action. The circular affords an opportunity to such a risky exporter to escalate the matter. If the concerned officer does not take a decision within 14 days, a petition before the Principal Chief Commissioner or Chief Commissioner of Central Tax shall be filed and if such petition is filed, a decision should be taken within 7 working days. The process of adjudication is quite distinct and different from terming a person a risky exporter, which tag cannot be perpetually affixed to an exporter as it would tantamount to interfering with his right to carry on exports based on suspicion. Therefore, the representation dated 10th March, 2022 should be considered by the sixth respondent within the timeline stipulated by this Court. The appeal stands disposed of with a direction to the sixth respondent to consider the representation dated 10th March, 2022 after giving an opportunity of personal hearing to the authorised representative of the appellant and an order be passed on merits and in accordance with law and communicate the same to the appellant within 15 days from the date of receipt of a copy of this judgment and order.

Summary

Issues:
1. Direction to complete investigation against the appellant.
2. Dispute over the tag of "risky exporter" on the appellant.
3. Adherence to timelines for decision-making by the authorities.
4. Distinguishing between terming someone a risky exporter and adjudication proceedings.

Analysis:

1. The appellant filed a writ petition seeking a direction for the completion of an investigation against them, challenging the tag of being a risky exporter. The appeal was made against the order directing the investigation's completion and subsequent orders. The Court noted the investigation was in its final stages, with a show-cause notice pending issuance.

2. The appellant argued that compliance was made with previous notices, and any alleged irregularities were rectified. The Court emphasized the distinction between labeling as a risky exporter and the formal adjudication process. Circulars provided strict timelines for such cases, ensuring timely decisions and opportunities for escalation.

3. The Court observed that the department failed to adhere to the prescribed timelines, ignoring the appellant's representation and violating the circular's directives. It emphasized that the risky exporter tag should not be perpetually attached, as it could impede the right to conduct exports based solely on suspicion.

4. Consequently, the Court disposed of the appeal by directing the concerned authority to consider the appellant's representation promptly, provide a hearing, pass a lawful order within 15 days, and communicate it to the appellant. The Court also allowed adjudication proceedings to proceed as per the law, highlighting the distinction between the two processes and refraining from issuing any costs orders.

This comprehensive analysis highlights the key legal issues addressed in the judgment, including the completion of investigations, the treatment of risky exporters, adherence to timelines, and the importance of distinguishing between administrative actions and formal adjudication proceedings.