2024 (10) TMI 1606 - HC - GST

Violation of principles of natural justice - non-applicatjon of mind - petitioner not heard before passing such orders - availment of excess ITC - HELD THAT - Unfortunately the petitioner could not file reply immediately to such notice owing to the fact that the petitioner s Authorized Person who is taking care of the statutory compliance was not well. However the excess ITC availed by the petitioner was already rectified/reversed by the petitioner during the monthly returns filed in the subsequent months and to the extent GSTR-3B was also filed however the respondent without considering the said aspect as if the petitioner has availed ITC in entirety passed the impugned orders towards tax liability as well as equivalent amount towards penalty/interest. Though the petitioner filed Applications dated 04.05.2024 and 12.07.2024 setting out such details along with relevant documents and sought for rectification the respondent without any application of mind rejected the Applications by virtue of the impugned orders dated 10.05.2024 and 27.08.2024 respectively. Therefore this Court is of the view that the impugned orders are nothing but an outcome of total non application of mind and also suffer from violation of principles of natural justice as the petitioner has not been heard before passing such orders. Hence this Court is inclined to set aside the same. The impugned orders dated 23.04.2024 as well as the Rejection Orders dated 10.05.2024 and 27.08.2024 respectively are set aside - the matters are remanded to the respondent for fresh consideration - petition allowed by way of remand.

Summary

Issues:
Challenge to order dated 23.04.2024 and rejection orders dated 10.05.2024 and 27.08.2024, violation of principles of natural justice.

Analysis:
The petitioner, an assessee, received Form DRC-01 notice for availing excess ITC for the tax period April 2018 to March 2019. Due to the Authorized Person's illness, the petitioner couldn't reply immediately. The excess ITC was rectified in subsequent monthly returns. Despite this, the respondent passed orders for tax liability and penalty/interest without considering rectification. The petitioner filed applications for rectification on 04.05.2024 and 12.07.2024, but the respondent rejected them without proper consideration. The Court found the orders to be a result of non-application of mind and a violation of natural justice as the petitioner wasn't heard. Consequently, the Court set aside the impugned orders.

The Court directed the setting aside of orders dated 23.04.2024 and rejection orders dated 10.05.2024 and 27.08.2024. The matters were remanded to the respondent for fresh consideration. The petitioner was instructed to file a reply with supporting documents within three weeks. The respondent was directed to issue a notice for a personal hearing, allowing the petitioner to present their case. The final decision was to be made in accordance with the law after hearing the petitioner.

In conclusion, the Writ Petition was allowed, and no costs were imposed. The connected Miscellaneous Petitions were closed as a result of the judgment.