Sai Consulting Engineers Private Limited Vs Union of India & Ors. (Gujarat High Court)
Issuance of SCN in undue haste, without reasonable time to respond to audit queries and DRC-01A intimation, violates principles of natural justice: Gujarat HC:
The Gujarat High Court, in the case of Sai Consulting Engineers Private Limited v. Union of India, has held that issuing a show-cause notice (SCN) without providing sufficient time to respond to prior queries violates the principles of natural justice. The case involved a petitioner who received an audit query memo with a one-day deadline and a subsequent intimation in Form DRC-01A with another one-day deadline. The petitioner requested an extension, but the authorities proceeded to issue an SCN two days later, reportedly to meet the limitation deadline for the 2017-18 fiscal year. The court observed that the timelines were “manifestly inadequate” and the authorities’ actions appeared premeditated to avoid the time-bar. The court also noted that the petitioner’s request for an extension was ignored, which constituted a denial of a fair opportunity.
The court directed that no coercive action should be taken against the petitioner during the pendency of the petition, thereby granting ad-interim relief. This decision aligns with established legal principles, including a Supreme Court precedent that states an order passed without an adequate opportunity to be heard must be set aside. Other High Court rulings were cited, reinforcing that limitation deadlines cannot override the constitutional and statutory requirement of a fair hearing. This case serves as a reminder that proper procedure and natural justice must be followed in adjudication proceedings, even when facing time constraints. The court’s ruling reinforces the importance of reasonable timelines and fair process in tax matters, preventing authorities from using administrative deadlines to bypass due process.
