Case Law Details
P.K. Japee & Co. Vs Deputy Commissioner of GST and Central Excise (Madras High Court)
Assessee allowed to submit an additional reply to a SCN against non-payment of tax within prescribed period under SVLDRS
The Hon’ble Madras High Court in M/s. P.K. Japee & Co. v. Deputy Commissioner of GST and Central Excise and Ors. [W.P.No.3587 of 2023 and W.M.P.No.3647 of 2023 dated February 7, 2023] has allowed the assessee to submit an additional reply to a Show Cause Notice (“SCN”) issued by the Revenue Department. Held that, no prejudice will be caused to the Revenue Department if such additional reply is allowed. Directed the Revenue Department to consider the assessee’s reply to the SCN on its merits and to pass fresh orders after providing the opportunity of fair hearing to the assessee and by following the principles of natural justice.
Facts:
M/s. P.K Japee & Co. (“the Petitioner”) had applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (“the SVLDRS”). The Petitioner failed to make payments on or before the deadline fixed under the SVLDRS and even after several extensions were granted by the Revenue Department (“the Respondent”), the Petitioner failed to make the payments. The Petitioner stated that it was unable to make such payments due to the critical health condition of one of its partners.
Consequently, a SCN dated April 28, 2022 (“the Impugned SCN”) was issued and the Petitioner submitted a reply to the Impugned SCN on May 11, 2022. Even before the final order was passed, the Petitioner was informed in the personal hearing that it was liable to pay the interest and penalty amount.
Being aggrieved, this petition has been filed.
The Petitioner has contended that, the entire tax liability has been paid off to the Respondent. Further, the Petitioner has sought for time to file an additional reply to the Impugned SCN.
Issue:
Whether the Petitioner be allowed to file an additional reply to the Impugned SCN?
Held:
The Hon’ble Madras High Court in [W.P.No.3587 of 2023 and W.M.P.No.3647 of 2023] held as under:
- Stated that, there will be no interference with respect to the Impugned SCN as the same had been passed in accordance with the law.
- Noted that, the Respondent must consider the Petitioner’s reply to the Impugned SCN based on its merits and in accordance with the law and only then should the Respondent make a final decision, following the principles of natural justice, which includes providing the Petitioner with the opportunity of hearing.
- Held that, no prejudice would be caused to the Respondent if the Petitioner is allowed to submit an additional reply.
- Directed the Petitioner to submit an additional reply to the Impugned SCN within a period of 2 weeks.
- Directed the Respondent to pass orders after the considering the replies submitted by Petitioner and after affording the opportunity of fair hearing.
- Further directed the Respondent, to refrain from taking any coercive steps against the Petitioner, until the final orders are passed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition has been filed challenging the impugned show cause notice dated 28.04.2022.
2. The petitioner had applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (Hereinafter referred to as Scheme, 2019). Admittedly, they have not made the payments on or before the deadline fixed under the said Scheme. Admittedly, several extensions for making the payments were also granted by the respondents and despite those extensions, the petitioner has not made payments. However, the petitioner would state that only due to the critical health condition of one of its partners, it was difficult to mobilize funds to make the payments as per the Scheme, 2019. Since payments have not been made by the petitioner on or before the deadline fixed under the Scheme, 2019, the impugned show cause notice dated 28.04.2022 has been issued.
3. The petitioner has also submitted a reply to the same on 11.05.2022. Even before a final order has been passed by the respondents, the petitioner has chosen to file this Writ Petition on the ground that they have been informed by the respondents in the personal hearing that the petitioner is liable pay the interest and penalty amount. The petitioner has also claimed that the entire tax liability has been paid to the respondents. The petitioner has raised several contentions in this Writ Petition and the same has also been reflected in the reply dated 11.05.2022 sent by the petitioner to the impugned show cause notice.
4. Being a show cause notice issued under Section 174 of the Central Goods and Services Tax Act, 2017 on account of the non payment of the interest and penalty amount by the petitioner, the question of interfering with the impugned show cause notice will not arise, as the same has been issued only under authority prescribed under law. However, necessarily, the respondents will have to consider the reply dated 11.05.2022 submitted by the petitioner on merits and in accordance with law and only thereafter pass final orders after adhering to the principles of natural justice including granting the petitioner the right of personal hearing.
5. The learned counsel for the petitioner submits that the petitioner may be granted time to file an additional reply to the impugned show cause notice. No prejudice would be caused to the respondents if the petitioner is allowed to submit an additional reply.
6. For the foregoing reasons, this Writ Petition is disposed of by directing the petitioner to submit an additional reply to the impugned show cause notice dated 28.04.2022, within a period of two weeks from the date of receipt of a copy of this order. On receipt of the additional reply from the petitioner, within the stipulated time, the respondents shall pass final orders after giving due consideration to the earlier reply dated 11.05.2022 as well as the additional reply, after affording a fair hearing to the petitioner including granting them the right of personal hearing within a period of two months thereafter. Till final orders are passed, no coercive steps shall be taken by the respondents against the petitioner. No Costs. Consequently, the connected Writ Miscellaneous Petition is closed.
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