2025 (2) TMI 363 - HC - GST

Principles of natural justice - petitioner was not granted sufficient time either for filing reply manually or appear for personal hearing - receipt of advancesale transaction that took place outside the State - HELD THAT - If according to the respondent the reply filed/uploaded by the petitioner was not visible clearly atleast they ought to have granted sufficient time to the petitioner so as to enable them in filing reply manually by sending notice through RPAD or any other mode of communication which the petitioner could have easy access. Often the Officials attached to the respondent-Department not only in the present case but also in umpteen numbers of case are continuously in the habit of merely uploading the Notice calling forth assessee s reply/Notice of Personal Hearing automatically under the view Additional Notice Column which assessee s are failing to notice (as the assessee s could not be expected to view the Online portal every now and then. Hence this Court feels that the Officials attached to the respondent-Department could adopt the practice of sending Notice calling forth assessee s reply/Notice of Personal Hearing by way of RPAD and by doing so the assessee s cannot take advantage of pleading ignorance of such notices and the precious time of the respondent- Department would not get wasted. Further in the present case it is seen that by virtue of the Reminder Notice No.3 dated 22.04.2024 the petitioner was called upon to appear for the personal hearing within 24 hours (i.e. on 23.04.2024) and file reply manually within 48 hours (24.04.2024) and within another 24 hours the impugned order came to be passed i.e. 25.04.2024. Had the real intention of the respondent is to provide fair opportunity of hearing to the petitioner-assessee to put forth their defence the same should be extended to the petitioner-assessee and it should not be a nominal one. Thus in the present case under the guise of providing opportunity the petitioner-assessee has been called for to file reply within a short span of time. Therefore as rightly pointed out by the learned counsel for the respondent the impugned order is arbitrary illegal and suffers from violation of principles of natural justice as the reply filed by the petitioner was not properly appreciated. Conclusion - The impugned order is arbitrary illegal and suffers from violation of principles of natural justice as the reply filed by the petitioner was not properly appreciated. The matter is remanded back to the respondent for reconsideration. Petition allowed by way of remand.

Summary

The primary issues considered in this legal judgment revolve around the procedural fairness and adherence to the principles of natural justice in the issuance and handling of a show cause notice by the respondent. The core legal questions addressed include whether the petitioner was given adequate opportunity to respond to the show cause notice and whether the impugned order was passed in violation of natural justice principles.

The legal framework relevant to this case involves the procedural requirements for issuing show cause notices and conducting hearings under administrative law principles. The precedents emphasize the necessity of providing a fair opportunity to be heard before any adverse order is passed. The court's interpretation focused on whether the procedural actions taken by the respondent met these standards.

The key evidence and findings reveal that the petitioner received a show cause notice in Form DRC-01 and responded with a reply in Form DRC-06. However, the respondent claimed the reply was not visible and issued a third reminder notice, which the petitioner did not notice in time to respond or attend the personal hearing. The court found that the respondent's actions, including the short notice period for the hearing and manual submission of the reply, did not provide the petitioner with a fair opportunity to present their case.

In applying the law to the facts, the court noted that the respondent's failure to adequately notify the petitioner through accessible means and the rushed timeline for compliance constituted a breach of natural justice principles. The court emphasized that procedural fairness requires clear communication and sufficient time for the petitioner to respond effectively.

Competing arguments were treated by examining the respondent's justification for their actions, which hinged on the technical issue of the visibility of the petitioner's uploaded reply. The court found this insufficient to override the petitioner's right to a fair hearing, especially given the lack of alternative notification methods used by the respondent.

The significant holdings of the court include the determination that the impugned order was arbitrary and illegal due to the violation of natural justice principles. The court highlighted the necessity of providing a genuine opportunity for the petitioner to be heard, rather than a nominal one. The court set aside the impugned order and remanded the matter back to the respondent for reconsideration, with specific instructions to allow the petitioner to file a manual reply within two weeks and to provide a 14-day notice for a personal hearing.

The core principles established by this judgment reinforce the importance of adhering to procedural fairness in administrative actions, particularly in ensuring that parties are given a reasonable opportunity to respond to notices and participate in hearings. The court's final determination underscores the need for clear communication and adequate timeframes in upholding the principles of natural justice.