2024 (12) TMI 448 - HC - GST

Violation of principles of natural justice - SCN issued without providing an opportunity for a personal hearing - HELD THAT - Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court allows the writ petition as statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated, particularly in light of judicial precedents supporting such relief. This court finds the petitioner s case to be meritorious. Accordingly, the writ petition is allowed and the appellate orders dated September 30, 2024 is quashed.

Summary

Issues:
Challenge to order under CGST Act and WBGST Act for financial year 2021-2022, Lack of opportunity for personal hearing, Partial tax payment made by petitioners, Health issues affecting response to notices, Delay in filing appeal under Section 107 of GST Act, Applicability of Limitation Act in filing appeal, Quashing of Impugned Order and appellate order, Interpretation of statutory provisions on limitation, Judicial precedent on liberal interpretation of limitation provisions.

Analysis:
The petitioners approached the Calcutta High Court under Article 226 seeking to quash an order passed under Section 74 of the CGST Act and WBGST Act for the financial year 2021-2022 by the Assistant Commissioner, State Tax Officer. The impugned order demanded a significant payment as interest and penalties following a Show Cause Notice alleging a tax payment shortfall. The petitioners argued that the Show Cause Notice was issued without a personal hearing, violating principles of natural justice, and that a partial tax payment made earlier was not considered during adjudication.

The petitioners cited health issues and the departure of their accountant as reasons for delays in responding to notices. Despite filing an appeal under Section 107 of the GST Act, the appellate authority rejected it solely on the grounds of limitation, disregarding the circumstances causing the delay. The petitioners contended that the Limitation Act should apply, seeking relief from the High Court to rectify procedural irregularities and ensure compliance with natural justice principles.

The Court, after examining the documents and arguments, allowed the writ petition, emphasizing the need for a liberal interpretation of limitation provisions in cases of genuine hardships. Citing a previous judgment, the Court highlighted that Section 107 of the GST Act does not expressly exclude the applicability of the Limitation Act, thus allowing for the extension of appeal filing timelines based on the circumstances of each case.

Considering the procedural irregularities and arbitrary actions, the Court found merit in the petitioner's case, quashing the appellate orders and directing the Appellate Authority to consider the condonation of delay application on its merits. All pending applications were disposed of, with no order as to costs, and parties were instructed to act on the server copy of the order downloaded from the official court website.