2024 (7) TMI 1026 - HC - GST

Seeking to quash the order of adjudication under Section 73 (9) read with Section 6 and 50 of the Karnataka Goods and Services Tax Act, 2017 - non-issuance of ASMT-10 dated 05.01.2022 for the tax period of 2018-19 through email or registered post - violation of principles of natural justice - HELD THAT - This Court is conscious of the fact that when a person is charged with any show cause notice, a reasonable opportunity of being heard is required to be given. Nevertheless, the present case, the appeal remedy being available, the petitioner shall make use of the same. The authorities shall provide a reasonable opportunity of hearing, either physically or through virtual mode (video conference) and after hearing the petitioner, by granting sufficient opportunity, pass suitable orders. Petition is disposed of - Liberty is reserved to the petitioner to approach the appellate authority as contemplated under the CGST Act of 2017 and file appropriate appeal.

Summary

Issues:
Challenge to order of adjudication under KGST Act, 2017 - Adequacy of opportunity granted to petitioner - Maintainability of petition when alternative remedy available under CGST Act - Allegations of lack of sufficient opportunity for hearing.

Analysis:
The petitioner filed a petition seeking to quash an order of adjudication under the Karnataka Goods and Services Tax Act, 2017. The petitioner, a proprietary firm engaged in the business of MS scrap steel, claimed to have provided all relevant details in the department portal and filed necessary forms. The dispute arose when the 2nd respondent issued various forms demanding tax, interest, and penalty for a discrepancy in output tax declared and output supplies furnished. The petitioner contended that he was not served some notices and was not given adequate opportunity for a fair hearing. The petitioner replied to the show cause notice seeking a personal hearing, which was scheduled but allegedly not provided sufficient time to appear. The petitioner claimed that he was not granted a fair opportunity to present his case.

The authorities argued that the petitioner was given reasonable opportunities for both physical and virtual hearings, but the petitioner failed to avail those opportunities. They contended that the petitioner's approach to the court was an attempt to avoid payment and that the petition was not maintainable due to the availability of an alternative remedy under the CGST Act. The authorities emphasized that the petitioner could raise all contentions before the appellate authority and that the petitioner's failure to receive an email notification for a virtual hearing was not a valid reason to remand the matter.

The Court acknowledged the importance of providing a reasonable opportunity for a hearing when issuing a show cause notice. However, considering the availability of an appeal remedy under the CGST Act, the Court directed the petitioner to utilize that remedy. The Court instructed the authorities to grant the petitioner a reasonable opportunity for a hearing, either physically or through virtual mode, and to pass suitable orders after hearing the petitioner. The Court disposed of the petition, reserving liberty for the petitioner to approach the appellate authority and file an appropriate appeal. It was clarified that the Court did not express any opinion on the merits of the case.