2024 (9) TMI 595 - HC - GST

Challenge to orders passed by the authority on the ground that without taking into consideration the overlapping period, the demand has been raised - HELD THAT - This Court finds that the factual position is not in dispute, as on the basis of the intelligence report, for the financial year 2017-18 and 2018-19, assessment was made by the authority under Annexure-1 dated 09.11.2023. But for the period from October, 2017 to March, 2018, the Adjudicating Authority passed the order on 04.12.2023 under Annexure-5. As it revealed from the order dated 04.12.2023, the Adjudicating Authority before passing the order has given thrice opportunity to the petitioner but the petitioner did not participate in the proceeding. As it appears from the record that the petitioner has intimated the period for which the Adjudicating Authority decided the matter and, as such, the same is the subject matter in the order dated 09.11.2023 passed by the authority on the basis of the intelligence report under Annexure-1. Merely because the petitioner made request letter to the authority to consider the same, that cannot be said that the petitioner had appeared and taken steps in the matter. Had the petitioner participated in the proceeding, it would have informed the authority with regard to the fact of overlapping of the amount and, as such, the authority could have considered the same. Furthermore, it is also not correct to say that the order passed by the authority under Annexure-1 involves the period, which has been taken in the order passed under Annexure-5. But fact remains, if the demand has been raised for a particular period by the authority under Annexure-1, the same have been taken into consideration while passing the order in Annexure-5. This Court is of the considered view that the order dated 04.12.2023 passed by the Adjudicating Authority under Annexure-5 cannot be sustained in the eye of law and the same is liable to be quashed and is hereby quashed. The matter is remitted back to the Adjudicating Authority for its rehearing and passing appropriate order in accordance with law by giving opportunity of hearing to the parties. Petition disposed off.

Summary

Issues:
Challenge to orders passed by authority under Annexures-1, 5, and 6 based on overlapping period.

Analysis:
The petitioner challenged the orders passed by the authority under Annexures-1, 5, and 6, alleging that the demand was raised without considering the overlapping period. The counsel for the petitioner argued that the order under Annexure-1 was based on an intelligence report for the years 2017-18 and 2018-19, while the order under Annexure-5 did not take into account the assessment already done by the authority under Annexure-1. On the other hand, the counsel for the opposite parties contended that the orders were distinct, covering different periods, and the petitioner had multiple opportunities to participate in the proceedings but failed to do so. The Adjudicating Authority had given the petitioner ample chances to present any overlapping amounts, but the petitioner did not engage in the process.

The High Court examined the facts and found that the assessment for the financial years 2017-18 and 2018-19 was conducted under Annexure-1, while the order under Annexure-5 pertained to the period from October 2017 to March 2018. The Court noted that the petitioner never appeared before the Adjudicating Authority despite being notified multiple times. Although the petitioner had requested the authority to consider the overlapping amounts, mere submission of a request letter was deemed insufficient to establish active participation in the proceedings. The Court emphasized that had the petitioner engaged in the process, the issue of overlapping amounts could have been addressed. It was observed that the order under Annexure-5 did not consider the facts presented in the order under Annexure-1, leading to a lack of proper assessment.

Consequently, the High Court held that the order dated 04.12.2023 passed by the Adjudicating Authority under Annexure-5 was not legally sustainable and quashed it. The matter was remitted back to the Adjudicating Authority for rehearing and issuing an appropriate order after providing an opportunity for both parties to be heard. The petitioner was directed to appear before the Adjudicating Authority on a specified date for the final disposal of the matter. The writ petition was disposed of based on these directions and observations.