2024 (11) TMI 462 - HC - GST

Violation of principles of natural justice - non-application of mind to the material on record - non-speaking order - HELD THAT - It is trite law that when any quasi-judicial order, which results in adverse consequences, must be made in compliance with the principles of natural justice. Reasoning is the heart-beat of every conclusion, absence of reason would vitiate the proceedings - In the case on hand, the impugned order does not reflect any reasoning. What is stated therein is that the reply is not acceptable and documents are not filed. The Assessing Officer has not dealt with the objections of the petitioner at all. This Court is of the view that the impugned order suffers from the vice of being a non-speaking order and thus violates principles of natural justice - the impugned order is set aside - Petition allowed.

Summary

Issues:
Challenge to order on grounds of natural justice, non-application of mind, and non-speaking order.

Analysis:
1. The petitioner, engaged in works contract, challenged an order by the respondent dated 12.07.2024, alleging violation of natural justice, non-application of mind, and a non-speaking order. The petitioner contended that the proposal to treat a sum of Rs. 42.86 crores as suppression under GST was erroneous as most receipts were disclosed under the VAT regime, with only a small portion under GST, and taxes were duly discharged. The petitioner emphasized compliance with tax laws and submission of detailed objections with supporting documents.

2. The petitioner argued that the Assessing Officer failed to consider the detailed replies and relevant materials provided, leading to erroneous proposals. The impugned order was criticized for lacking reasoning and merely stating the reply was unconvincing without addressing the objections raised. The petitioner highlighted the necessity of quasi-judicial orders to adhere to principles of natural justice and provide adequate reasoning for adverse decisions.

3. The Court found the impugned order to be non-speaking, devoid of reasoning, and failing to address the petitioner's contentions. Consequently, the order was set aside, granting the respondent the opportunity to re-do the assessment after affording the petitioner a chance to submit objections. The petitioner was allowed to treat the Assessment Order as a Show Cause Notice and present objections within two weeks for further consideration by the respondent.

4. In conclusion, the Writ Petition was allowed, with no costs imposed, and the connected matter was closed. The judgment emphasized the importance of adherence to natural justice principles, proper reasoning in quasi-judicial orders, and providing opportunities for parties to present their case effectively before reaching a decision.