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TMI Blog2024 (7) TMI 1511X X X X Extracts X X X X X X X X Extracts X X X X ..... to pass the impugned order by imposing tax, interest and penalty. In the present case on hand, it is the case of respondents that despite providing suitable opportunity, the petitioner/taxpayer has not filed reply in Part-B and he has not filed objections with explanation instead the taxpayer has submitted several documents. He has not filed the reply on time despite granting sufficient opportunity and reminders requesting and insisting the petitioner/taxpayer to file his reply on or before the relevant date stipulated therein and subsequently adhering to the request, provided an opportunity of personal hearing on 22.01.2024 and thereafter again a further reminder to file the reply for DRC-01 and to make use of the opportunity of personal hearing which was scheduled on 27.02.2024. Apparently, it is seen from the impugned order that the response to the show cause notice has not been adverted to and the personal hearing which was sought for by the letter dated 12.03.2024 was also not provided to the petitioner and an impugned order came to be passed on 30.03.2024 under Section 73 (9) and (10) of the KGST Act, 2017. In this background, it is to be seen whether the opportunity of filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y deem fit and proper in preventing Respondent No.2 or functionaries working under its office from proceeding in excess or abuse of their jurisdiction in demanding the tax amount along with interest and penalty. b) Issue a writ of certiorari, or any other writ, order or direction as this Hon ble Court may deem fit and proper, by quashing the order passed in Form GST DRC-07 vide No. ACCT (AUDIT-2)/Blr/GST/2023-24/1878 dated 30.03.2024 passed by the 3rd Respondent enclosed as Annexure-R demanding tax amount along with interest and penalty in as illegal and untenable in law, in the facts and circumstances of the case; c) Issue a writ of certiorari, or any other writ, order or direction as this Hon ble Court may deem fit and proper, by quashing and setting aside the impugned Notification No.9/2023 dated 31.03.2023 issued by Respondent no.2 Annexure-S being ultra vires the Constitution of India and provisions of CGST Act, 2017. d) Issue a writ of mandamus, or such other writ, order or direction, as this Hon ble Court may deem fit and proper, setting aside the in Form GST DRC 07 vide No. ACCT (AUDIT-2)/Blr/GST/2023-24/1878 passed by the 3rd Respondent dated 30.03.2024 enclosed as Annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.02.2024 requesting to file additional reply and to attend personal hearing and thereafter petitioner filed a detailed reply/objection statement to show cause notice once again by letter dated 12.03.2024 along with supporting documents along with the letter dated 14.03.2024, the petitioner specifically requested for personal hearing before disposing of the matter. 5. It is the case of petitioner that without even considering the documents submitted in a proper perspective and without affording even a personal hearing, respondent No. 3 herein proceeded to issue an order in Form GST DRC-07 vide No.ACCT (Audit-2)/Blr/GST/2023-24 on 30.03.2024 demanding a sum of Rs. 22,99,62,468/- towards tax, interest and penalty. The same was confirmed by the impugned order. The petitioner being aggrieved by the said impugned order is before this Court primarily contending that the order passed by respondent No. 3 is wholly arbitrary, illegal, unconstitutional and without jurisdiction for the reason that petitioner had filed his reply to GST ADT-01 and filed a reply to the draft audit report and so also filed a reply to the show cause notice. But however, respondent No. 3 conveniently neglected and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner contends that the provisions prescribed under the CGST Act mandates that respondent No. 3 provides sufficient opportunity for filing reply and sufficient opportunity for personal hearing before passing any final determination with regard to tax, interest and penalty imposition. 8. It is also contended by learned counsel for the petitioner that even if it is assumed that no personal hearing is provided, respondent No. 3 is duty bound under law to afford an opportunity of being heard before passing any adverse order, which would affect the interest of the petitioner. Therefore, he contends that the objection raised by the respondents with regard to non maintainability of the writ petition would not come in the way of this Court entertaining the writ petition for the reason that respondent No. 3 has infringed the fundamental rights of the petitioner and has violated the principles of natural justice by not providing suitable opportunity of filing reply and fair hearing to the petitioner as is contemplated under the statute. 9. In the background of these arguments, learned counsel for the petitioner has relied upon the following judgments in support of his case. 1. M/s. Kro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was considered and as the petitioner had sent a letter dated 27.02.2024 to the respondent No. 3 stating that he would submit his response positively by 01.03.2024, the same was provided and it is further contended by learned Additional Advocate General that after issuance of notice, since there was no reply filed, it was treated as there is no objections towards the liability when DRC-01A was confirmed in Form GST DRC-01 and since no objections and explanation was given by the taxpayer, though certain documents were submitted, they cannot be held as to be replied nor explanation for the observations issued in Form DRC-01. It is also contended that respondent No. 3 provided a personal hearing and thereafter followed by the reminder to file reply and also to make use of personal hearing on 27.02.2024. Despite providing these opportunities for filing reply and personal hearing and provide the explanations, the taxpayer has not responded neither availed the opportunity of filing of reply accordingly, passed the order which is impugned herein. 11. Learned Additional Advocate General vehemently contends that apart from the preliminary objection of petition being not maintainable on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. (vii) United Bank of India vs. Satyawati Tondon and others, (2010) 8 SCC 110. (viii) State of Maharastra and others vs. Greatship (India) Limited, 2022 SCC OnLine 1262. (ix) A Judgment of this Court in the case of M/s. AKR Constructions Limited vs. The Commissioner Central Goods and Services Tax and Central Excise and others, WP. No. 100278/2024(T-RES), 25.01.2024. 14. Having heard learned counsel for both parties fundamentally, it is well laid down principle of law that when the revenue issues a show cause notice, opportunity has to be given to the taxpayer to submit reply and thereafter an opportunity of hearing is also contemplated under the Act, 2017. In the present case on hand, it is the case of petitioner s that after issuance of show cause notice, he has filed the reply and after the audit report, he has filed the objections and an explanation. However, the same was not taken into account and despite making a request for personal hearing, the same was not granted and hastily respondent No. 3 has proceeded to pass the impugned order by imposing tax, interest and penalty. Chapter XV of the Central Goods and Services Tax Act, 2017 deals with demand and recovery. Section 73 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity and reminders requesting and insisting the petitioner/taxpayer to file his reply on or before the relevant date stipulated therein and subsequently adhering to the request, provided an opportunity of personal hearing on 22.01.2024 and thereafter again a further reminder to file the reply for DRC-01 and to make use of the opportunity of personal hearing which was scheduled on 27.02.2024. However, the taxpayer having nothing utilized these many opportunities provided by respondent No. 3, it would be farfetched to say that the revenue has to wait till the petitioner/taxpayer files his reply and attends the personal hearing and does not bother for the opportunity granted despite extension being provided. This clearly goes to show that there is ulterior motive and oblique intention of the taxpayer to prolong the proceedings till the last date in order to defeat the rights vested with the authorities and thereby to make this as a time barred claim. 17. On perusal of records, it is seen by the letter dated 19.02.2024 issued by respondent No. 3 that a reminder was given wherein the date by which reply was to be submitted is slated to be on 27.02.2024 and the date of personal hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out his reply to the show cause notice dated 27.09.20023. If the objective of Section 75 (4) of the Act is kept in mind, requirement is of providing an opportunity wherever adverse order is sought to be passed. 6. Taking note of such legal mandate, it would be appropriate to permit the petitioner to participate in the adjudication process and accordingly, the order at Annexure-A is set aside. Consequential recovery proceedings initiated by the 2nd respondent at Annexure-B also stands set aside. The matter is restored to the stage of show cause notice. Petitioner is permitted to make out his reply to the show cause notice within a period of four weeks from receipt of certified copy of the order and question of raising any ground on limitation would not arise. All contentions are kept open. 20. So also another Judgment of a coordinate Bench of this Court in the case of Bangalore Golf Club vs. Commercial Tax Officer (Enforcement), [2024] 164 taxmann.com 51 (Karnataka), wherein similar provisions of Section 75 (4) of the Act, 2017 was for consideration as the petitioner therein was not provided reasonable opportunity as contemplated under Section 75 (4) of the Act, 2017 before adverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mandate of Section 75 (4) stands complied. We are not in agreement to that submission as the opportunity of hearing when is contemplated under the statute, it has to be comprehensive and it cannot be short-circuited. The show case notice reflects that the date of reply was given on 30.102.023 and before the personal hearing date is given, it would be about a superfluous and would defeat the actual intent of the legislation of giving an opportunity of hearing. It is not expected that before the reply is filed, an assessee can be heard and thereafter the reply is filed. It is against the normal procedure and is against the normal practice of the parties that personal hearing is preponed and the reply is subsequently filed. This is not the intent of provisions of sub-Sections (4) and (5) of Section 75. 23. It is also relevant to note that argument put forth by the learned counsel for the petitioner, who has relied upon the Judgment of the division bench of Allahabad High Court, in the case of M/s. Kronos Solutions India Private Limited vs. Union of India and Others, Writ Tax No.1417/2023, wherein it is held at paragraph No.7 as under: 7. Undeniably, the appeal authority may either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under Section 107 of the Act, 2017 provided and when there is alternative efficacious remedy though which is not a absolute bar to the maintainability of the writ petition. The writ petition should be entertained only in exceptional circumstances. It is relevant to note here the paragraph No.11, wherein the Hon ble Apex Court has provided the relevant exceptional circumstances, which read as under : 11. The respondent had a statutory remedy under Section 107. Instead of availing of the remedy, the respondent instituted a petition under Section 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is : (i) a breach of fundamental rights; (ii) a violation of the principles of natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to the vires of the statute or delegated legislation. 26. He has also relied upon the Judgment in the case of State of Uttar Pradesh and Others vs. Kay Pan Fragrance Private Limited, reported in (2020) 5 SCC 811, wherein it is held that the taxpayer must take recourse to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the representation, if any, made by person chargeable with tax, determine the amount of tax, interest or penalty equivalent to 10% of tax or Rs. 10,000/-, whichever is higher due from such person, and issue an order. 29. Further, the next clause 10 reads that the proper officer shall issue the order under sub-Section 9 within three years from the due date for furnishing of annual return of financial year, to which tax not paid or short paid or input tax credit wrongly availed or utilized, relates to or within three years from the date of erroneous refund and subsequently, to top it all, Section 75 (4) of the CGST Act, 2017 contemplates that an opportunity of hearing shall be granted, where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. 30. Coming back to the case on hand, admittedly impugned order is passed which is adverse and against the petitioner/taxpayer, wherein he is ordered to pay tax, interest or penalty. The impugned order does not show or deal with the objections or response filed by the petitioner and admittedly no opportunity of hearing has been provided, though it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en done in the present case. 33. Under the circumstances the petition deserves to be allowed. However, the same will have to be with caution and costs imposed on the petitioner for non utilization of the opportunities and non filing of the reply within time and as promised in the letter dated 27.02.2024, wherein the petitioner had said that he would file his reply on response by 1.03.2024, positively but did not file the same and also not utilized the opportunity of personal hearing provided by the revenue. Under the circumstances, I pass the following: ORDER i. The impugned order dated 30.03.2024 is hereby quashed. ii. The matter is remitted back to the respondent No. 3 Assistant Commissioner of Commercial Tax (Audit No.2) to take into consideration the response already filed by the petitioner/tax payer dated 12.3.2024 and consider the matter afresh after affording an opportunity of personal hearing, as stipulated under Section 75 (4) of the CGST Act and to proceed thereafter in accordance with law, subject to payment of costs of Rs. 50,000/- (Rupees Fifty Thousand) to the respondent/Revenue on the next date of hearing i.e., 05.08.2024. iii. In view of the fact that parties are re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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