2024 (7) TMI 921 - HC - GST

Levy of late fee and penalty - non filing of annual returns and reconciliation statement in time - inability to participate in proceedings culminating in the impugned order because GST compliances were entrusted to a Chartered Accountant and such Chartered Accountant had not noticed the show cause notice and impugned order - HELD THAT - On examining the impugned order, it is evident that the tax payer fail to file objections to the show cause notice. By taking into account the assertion that such non participation was on account of not being aware of proceedings, the interest of justice warrants reconsideration especially by taking into account that the entire late fee portion was remitted by the petitioner. The impugned order dated 13.02.2023 is set aside and the matter is remanded for reconsideration. The petitioner is permitted to submit a reply to the show cause notice within fifteen days from the date of receipt of a copy of this order - petition disposed off by way of remand.

Summary

Issues:
Challenge to late fee and penalty imposition for non-filing of annual returns and reconciliation statement; Compliance with principles of natural justice; Reconsideration of impugned order based on non-participation due to lack of awareness; Remand for reconsideration and opportunity for the petitioner to respond.

Analysis:

1. Late Fee and Penalty Imposition: The petitioner challenged an order imposing late fee and penalty for not filing annual returns and reconciliation statement on time. The petitioner argued that the GST compliances were handled by a Chartered Accountant who failed to notice the show cause notice and the impugned order. The counsel for the petitioner highlighted discrepancies in the late fee amount mentioned in the order and the actual sum remitted by the petitioner, seeking an opportunity to contest the matter on its merits.

2. Compliance with Principles of Natural Justice: The Additional Government Pleader for the respondent confirmed that the principles of natural justice were adhered to in the proceedings. He mentioned the issuance of intimation, show cause notice, and offering a personal hearing to the petitioner. However, it was noted that the taxpayer failed to file objections to the show cause notice, which was attributed to a lack of awareness of the proceedings.

3. Reconsideration and Remand: Upon examining the impugned order, it was observed that the non-participation by the taxpayer was due to not being aware of the proceedings. Considering that the entire late fee portion was remitted by the petitioner, the court deemed it necessary to set aside the order dated 13.02.2023 and remand the matter for reconsideration. The petitioner was granted fifteen days to respond to the show cause notice, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, before issuing a fresh order within three months.

4. Disposition: The writ petition was disposed of with no costs, and the related miscellaneous petitions were closed. The judgment emphasized the importance of ensuring procedural fairness and providing adequate opportunities for parties to present their case, highlighting the significance of compliance with natural justice principles in administrative and legal proceedings.