2024 (10) TMI 1453 - HC - GST

Levy of penalty u/s 130 of GST Act - violation of principle of natural justice - HELD THAT - The order impugned though indicates the communication seeking date for personal hearing beyond 10.02.2024, however, no determination/reaction to the said prayer was indicated even in the order impugned, which clearly indicates that the prayer was not even adverted to and therefore, apparently the order has been passed in violation of principle of natural justice. Once a prayer was made seeking a date beyond the date fixed, it was incumbent upon the authority to either grant the same or decline and communicate the same to the petitioner. The order impugned dated 18.06.2024, Annexure-1, is quashed and set aside - Petition allowed.

Summary

Issues:
Violation of principle of natural justice in imposing penalty under Section 130 of the Goods and Services Tax Act, 2017.

Analysis:
The petitioner challenged the order imposing a penalty under Section 130 of the Goods and Services Tax Act, 2017, on the grounds of violation of the principle of natural justice. The petitioner contended that there was a lack of opportunity for personal hearing despite multiple communications seeking a suitable date due to the counsel's unavailability. The petitioner argued that the order was passed without considering the exhaustive response and legal precedents submitted. The petitioner further alleged that the order was beyond the scope of the show cause notice, indicating a violation of natural justice principles.

The respondent, however, defended the order, stating that the petitioner had been given sufficient opportunities for a personal hearing through two show cause notices, and the delay in availing the opportunity cannot be considered a violation of natural justice. The respondent also argued that the order was appealable, suggesting the availability of an alternative remedy.

Upon considering the submissions, the court found that the petitioner's requests for a suitable date for a personal hearing were not adequately addressed by the authority. The court noted that the order was passed after a significant delay, during which the petitioner could not approach the authority for a hearing. The court observed that the order did not address the petitioner's request for a hearing date, indicating a violation of natural justice principles.

The court held that once a request for a hearing date beyond the fixed date was made, the authority should have either granted or declined it, but failing to do so amounted to a violation of natural justice. The court did not delve into the merits of the order but focused on the procedural irregularities. The court rejected the argument about the availability of an alternative remedy, emphasizing that the violation of natural justice is an exception to such pleas.

Consequently, the court allowed the writ petition, quashed the impugned order, and directed the authority to set a fresh hearing date with proper notice to the petitioner, emphasizing the importance of following due process and principles of natural justice in such matters.