9911796707
TMI BlogASSESSMENT MADE EVEN BEFORE THE SHOW CAUSE NOTICE TIME VIOLATION OF PRINCIPLES OF NATURAL JUSTICEX X X X Extracts X X X X X X X X Extracts X X X X ..... ASSESSMENT MADE EVEN BEFORE THE SHOW CAUSE NOTICE TIME VIOLATION OF PRINCIPLES OF NATURAL JUSTICE - By: - Mr. M. GOVINDARAJAN - Goods and Services Tax - GST - Dated:- 3-9-2024 - In M/S. AVEXA CORPORATION PRIVATE LIMITED VERSUS THE STATE OF ANDHRA PRADESH AND OTHERS - 2024 (8) TMI 1195 - ANDHRA PRADESH HIGH COURT , the registration certificate of the petitioner was cancelled by the Department on 28.10.2023. As per the cancellation order, the cancellation would be effect from 31.08.2023. The petitioner sought for revocation of cancelled registration on 30.10.2023 which was rejected by the Authority on 24.11.2023. The petitioner filed an appeal against the rejection order. The appeal was allowed by the Appellate Authority. The second respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent issued a fresh intimation dated 19.12.2023 pointing out a discrepancy of Rs.31.20 crore. Thereafter the Authority issued a show cause notice dated 26.12.2023 demanding Rs.31.52 crore on account of discrepancies in the returns filed by the petitioner or to explain, by filing written objections, within 30 days, why such amount should not be collected from the petitioner. In the said notice the Authority requested the petitioner to choose a personal hearing among the three dates 04.01.2024, 18.01.2024 and 24.01.2024. The petitioner requested the second respondent, vide his letter dated 22.01.2024 to restore the registration certificate and to grant time to the petitioner to log into the website of the tax department for the purpose of ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of details and for resetting the e-way bill password and for issuance of e-invoice. The petitioner, in that letter, also asked to grant two weeks time to give the reply after being able to log into the website of the department. The second respondent issued an order on 24.01.2024 confirming the demand raised in the show cause notice and the petitioner was directed to pay the tax and the penalty. The petitioner filed the present writ petition before the High Court challenging the order dated 24.01.2024 passed by the second respondent on the ground of violation of principles of Natural Justice by the second respondent. The petitioner submitted the following before the High Court- The impugned order, dated 24.01.2024, suffers from va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious infirmities. The show cause notice, dated 26.12.2023, had granted 30 days time to the petitioner to respond. However, the impugned order has been passed 24.01.2024 even before the period of 30 days had elapsed. The petitioner, by letter dated 22.01.2024, had sought time for responding to the show cause notice, dated 26.12.2023, and also for restoration of the registration of the petitioner. The said letter is clearly not a submission of objections. The second respondent treated as a response to the show cause notice. The presence of the authorized representatives at the office of the 2nd respondent, for submission of the letter dated 22.01.2024, has been treated as if the petitioner had availed the opportunity of personal hearing. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... options given by the 2 nd respondent are dated 04.01.2024, 18.01.2024 and 24.01.2024 whereas the personal hearing said to have been availed by the petitioner is on 22.01.2024, which is not in accord with the show cause notice of the 2 nd respondent itself. The Revenue submitted the following before the High Court The letter of the petitioner dated 22.01.2024 was in response to the earlier letter dated 13.01.2023. The petitioner being fully aware of the show cause notice dated 26.12.2023 had chosen not to respond to the show cause notice and had responded only to an earlier proceeding. The conduct of the petitioner in deliberately refusing to respond to the show cause notice dated 26.12.2023 disentitles the petitioner for any relief from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court. The High Court considered the submissions of the petitioner and the Revenue. The High Court indicates the steps to be followed in case of issuing of show cause notice as detailed below- The person on whom action is proposed, should be given the opportunity to set out his case against such proposed action. This would require that, the person against whom action is proposed is informed of the entire case against him and the material that is proposed to be used against him is also furnished to him. The affected person should be given adequate opportunity to make out his case against the proposed action. The affected should be given an opportunity to gather all the material that he proposes to use against the proposed action. Any vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or violation of this requirement would amount to violation of principles of natural justice, which would render the proposed proceedings invalid. The High Court observed that in the present case notice was issued by the second respondent on 26.12.2023 giving 30 days time to the petitioner to file a reply to the Authority. The impugned order has been passed even before the expiry of the time for filing reply to the show cause notice. The petitioner was entitled to gather all the material required for his defense. This would mean that the petitioner would have to be given access to the website of the department, after restoration of registration, with adequate time being given to the petitioner to gather all the details such as e-way bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls, e-invoices, etc. In the present case, such an opportunity was not given to the petitioner as the appellate authority s order, restoring registration, was passed on 22.01.2024 and the impugned order has been passed on 24.01.2024. The High Court was of the opinion that there has been violation of principles of natural justice rendering the impugned order invalid. The High Court allowed the appeal filed by the petitioner. The High Court ordered that it is open to the 2 nd respondent to undertake assessment proceedings for tax and penalty, on the basis of the show cause notice dated 26.12.2023. However, such proceedings would be taken up after giving adequate opportunity of hearing to the petitioner by way of granting two weeks time from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of order to the petitioner to file his objections to the show cause notice. Thereafter, a personal hearing will also be granted to the petitioner. The order of assessment shall contain assessment of tax and penalty, if any, shall contain reasons. - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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