2023 (11) TMI 95 - HC - GST

Violation of principles of natural justice - sufficient time to file effective reply to defend not provided - HELD THAT - Admittedly, the notice dated 21.06.2023 was not served on the petitioner by way of any physical mode and was only uploaded through online Portal on 21.06.2023, which falls on Wednesday, followed two working days, and unfortunately, the petitioner could not have access through the website on those days and happened to notice the same belatedly and the moment, the petitioner noticed the said notice dated 21.06.2023, they appeared before the respondent-Department on very next working day, i.e. Monday and requested time for production of documents. Thus, it is clear that by means of the last so-called III Opportunity of hearing, the petitioner was granted only a short span of time, i.e. less than 2 days, and which is less than 36 hours, and at any costs, it does not merit on the aspect of providing due opportunity. As per the provisions of the Act, sufficient time ought to have been granted for filing their reply, unless and until, sufficient time is granted to the petitioner, they will not be in position to file their reply in an effective manner. This Court is of the view that the impugned orders are wholly untenable not only on the ground of total violation of principles of natural justice but also on other grounds, including failure to pass a speaking order as rightly contended by the learned counsel for the petitioner - the Writ Petition is allowed, impugned order, viz., the assessment order dated 29.06.2023 is set aside and the matter is remanded to the second respondent for fresh consideration.

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Insufficient time provided for responding to notices.
3. Lack of a speaking order by the respondent.

Summary:

Violation of Principles of Natural Justice:
The petitioner challenged the assessment order dated 29.06.2023 and the show cause notice dated 21.04.2023, arguing that the impugned orders suffer from a violation of principles of natural justice. The petitioner claimed that the second respondent did not consider their replies and failed to provide adequate reasons for rejecting their explanations. The court noted that the respondent-Department had provided three opportunities for hearing but did not afford sufficient time for the petitioner to file an effective reply, thereby violating the principles of natural justice.

Insufficient Time Provided for Responding to Notices:
The petitioner contended that the time provided for responding to the notices was insufficient. The first notice dated 21.04.2023 gave 14 days, the second notice dated 16.06.2023 gave 4 days, and the third notice dated 21.06.2023 gave less than 36 hours for the petitioner to respond. The court observed that the third notice was uploaded on the e-Portal at 9.52 p.m. on 21.06.2023, calling for a hearing on 23.06.2023 at 11.00 a.m., which did not provide a fair opportunity for the petitioner to produce the required documents.

Lack of a Speaking Order by the Respondent:
The court found that the impugned order dated 29.06.2023 did not provide clear reasons for rejecting the petitioner's explanations. The order merely stated that the petitioner's reply could not be accepted without specifying why the explanations were unsatisfactory. The court emphasized the need for a speaking order that addresses all issues raised by the petitioner.

Conclusion:
The court concluded that the impugned orders were untenable due to the violation of principles of natural justice, insufficient time for response, and the lack of a speaking order. The assessment order dated 29.06.2023 was set aside, and the matter was remanded to the second respondent for fresh consideration. The court directed the second respondent to provide a fair opportunity for a personal hearing on 16.11.2023 and to pass a fresh, speaking assessment order by 12.12.2023. The writ petition was allowed, and the connected writ miscellaneous petition was closed. The matter was listed for reporting compliance on 14.12.2023.