2024 (8) TMI 1195 - HC - GST

Violation of principles of natural justice - impugned order has been passed 24.01.2024 even before the period of 30 days (SCN had granted 30 days time to the petitioner to respond) had elapsed - HELD THAT - In the present case, the notice was issued on 26.12.2023 granting 30 days time. The impugned assessment order has been passed even before the said period has been elapsed. The petitioner was entitled to gather all the material required for his defense. This would mean that the petitioner would have to be given access to the website of the department, after restoration of registration, with adequate time being given to the petitioner to gather all the details such as e-way bills, e-invoices, etc. In the present case, such an opportunity was not given to the petitioner as the appellate authority s order, restoring registration, was passed on 22.01.2024 and the impugned order has been passed on 24.01.2024. This Court is of the opinion that there has been violation of principles of natural justice rendering the impugned order invalid - Petition allowed.

Summary

Issues:
Violation of principles of natural justice in tax assessment proceedings.

Analysis:
The petitioner, a registered taxpayer under CGST and APGST Acts, had their registration cancelled, which was later revoked through an appeal. However, during the restoration process, the tax department issued a notice under the APGST Act regarding discrepancies in tax filings. Subsequently, a show cause notice was issued demanding a significant amount from the petitioner, who requested time for a detailed response and restoration of registration. The tax department passed an order confirming the demand, prompting the petitioner to challenge it in a writ petition, alleging a violation of natural justice principles.

The petitioner argued that the order suffered from various flaws, including premature issuance before the response deadline and misinterpretation of the petitioner's letter as a response to the show cause notice. Additionally, discrepancies in the dates for personal hearing were highlighted, questioning the fairness of the proceedings. On the other hand, the Government Pleader contended that the petitioner failed to respond to the show cause notice intentionally, impacting their eligibility for relief.

The Court emphasized the importance of adhering to natural justice principles, ensuring the affected party has sufficient opportunity to present their case and gather relevant material for defense. In this case, the assessment order was issued before the petitioner could access necessary information post-registration restoration. This premature action was deemed a violation of natural justice, rendering the order invalid.

Consequently, the writ petition was allowed, setting aside the penalty proceedings and instructing the tax department to conduct assessment proceedings based on the show cause notice, granting the petitioner two weeks to respond and arranging a personal hearing. The assessment order must provide reasons, and costs were not awarded. Pending applications were to be closed as a result of the judgment.