Case Law Details
Seya Industries Limited Vs State of Maharashtra and Ors. (Bombay High Court)
The Bombay High Court, in Seya Industries Limited Vs State of Maharashtra and Ors., set aside GST adjudication orders on the ground that no opportunity of personal hearing was granted before passing adverse orders. The petitioner argued that the impugned orders were passed without compliance with Section 75(4) of the Central Goods and Services Tax Act, 2017, which mandates granting an opportunity of hearing where an adverse decision is contemplated or where a request for hearing is received. The impugned orders merely recorded that the petitioner had not responded to notices and did not mention whether any hearing was granted or whether the petitioner had failed to attend.
The State submitted that no hearing was granted because the petitioner had not received the notices and had not filed any response. The authorities therefore proceeded on the basis that granting a hearing would serve no purpose.
After hearing both sides, the High Court held that even if the petitioner had not replied to the show cause notices, an opportunity of hearing ought to have been provided before passing adverse orders. Accordingly, without examining the merits of the dispute, the Court quashed the impugned orders and remanded the matter for de novo adjudication. However, since the petitioner had chosen not to file replies to the show cause notices earlier, the Court declined to permit filing of fresh replies at this stage.
The Court directed the respondents to pass reasoned orders after granting personal hearing to the petitioner. Notice of personal hearing was directed to be communicated at least seven working days in advance. The petitioner was also permitted to file written submissions within three working days after the hearing regarding matters discussed during the hearing.
In a connected writ petition, the petitioner challenged show cause notices after having already filed replies dated 4 July 2023. The petitioner requested that the adjudicating authority consider the reply and grant a personal hearing before passing any order.
The High Court directed the adjudicating authority to adjudicate the show cause notices after considering the petitioner’s reply and after granting personal hearing with seven working days’ prior notice. The Court further directed that if the Assessing Officer intended to rely upon any judgment or order of a court or tribunal, a list of such judgments or orders should be provided to the petitioner in advance so that the petitioner could address or distinguish them during the hearing.
The Court also permitted the petitioner to file written submissions within three working days after completion of the hearing and directed that any order passed should be a reasoned and detailed order dealing with all submissions of the petitioner. The show cause notices were directed to be disposed of on or before 30 September 2024.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. One of the grounds raised in the petition is that the impugned orders have been passed without granting an opportunity of hearing. The orders do not not make any reference of hearing being granted or petitioner not attending. It only says that petitioner did not respond to any of the notices. Mr. Shah submitted that Section 75 of the Central Goods and Services Tax Act, 2017 (the CGST Act) in Sub Section (4) provides for an opportunity of hearing to be granted where a request is received or where any adverse decision is contemplated against such person. Therefore, according to Mr. Shah as the impugned orders are adverse to petitioner, petitioner should have been given an opportunity of hearing. Since it has not been granted the orders passed are vitiated.
2. Ms. Vyas submitted that her instructions are that no hearing was given because petitioner never received any of the notices. The officer therefore proceeded on the basis that petitioner has nothing to submit in response and it would serve no purpose in giving hearing.
3. Having heard counsel, in our view even though petitioner had not replied to the Show Cause Notices, an opportunity of hearing should have been granted before passing the impugned orders.
4. In view thereof, keeping open the rights and contentions of the parties and without going into the merits of the matter, we quash and set aside the impugned orders and remand the matter for denovo consideration. Since petitioner had chosen not to file any reply to the Show Cause Notices, we are not inclined to give fresh lease of life by giving petitioner an opportunity now to file reply. Mr. Shah’s request is declined.
5. At the same time, respondent shall pass a reasoned order after giving a personal hearing to petitioner and the order shall deal with all submissions of petitioner. Notice of personal hearing shall be communicated atleast seven working days in advance. After personal hearing if petitioner wishes to file submissions regarding what transpired during the personal hearing, petitioner may do so within three working days of the personal hearing.
6 Petition disposed.
WRIT PETITION NO. 15700 OF 2023
7. Petitioner has approached this court challenging the Show Cause Notices issued and after filing reply. Mr. Shah states Respondent No.3 who has issued the Show Cause Notices may adjudicate the matter after considering the response dated 4th July 2023 and after giving a personal hearing to petitioner
8. In view thereof, following order is passed :
(a) Respondent No. 3 shall adjudicate the Show Cause Notices issued considering the reply/representation dated 4th July 2023 filed by petitioner.
(b) Before passing any order, petitioner will be given a personal hearing, notice whereof shall be communicated atleast seven working days in advance.
(c) If the Assessing Officer is going to rely on any judgment/order of any Court or Tribunal, a list thereof shall be made available to petitioner in advance before the personal hearing so that petitioner will be able to deal with the same/distinguish the same during the personal hearing.
(d) Should, petitioner wish to file written submission to record what transpired during the personal hearing, petitioner may file the written submission within three working days of the completion of personal hearing.
(e) Any order passed shall be a reasoned and detailed order dealing with all the submissions of petitioner.
(f) Show Cause Notices shall be disposed on or before 30th September 2024.
9. Petition disposed.
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