GST Notice Returned ‘Addressee Left’ – Ensure Alternative Delivery: Madras HC

P. Godwin Prasanna Vs Union of India (Madras High Court)

Madras High Court has set aside an order dated April 13, 2024, issued by the 5th respondent against P. Godwin Prasanna, remanding the matter for fresh consideration. The court’s decision, delivered at the admission stage of the writ petition, primarily hinged on the principles of natural justice, finding that the petitioner was not afforded an opportunity for a personal hearing due to unserved communications.

The case, heard by consent of both parties, highlighted a procedural lapse wherein all notices and communications from the 5th respondent were dispatched to the petitioner’s previous address. These communications were subsequently returned with the endorsement “Addressee Left,” leading to the petitioner’s unawareness of the ongoing proceedings and, consequently, their failure to file a timely reply. As a result, the impugned order was passed without the petitioner being given an opportunity to present their case.

During the proceedings, the counsel for the petitioner submitted that the petitioner was willing to pay a sum of ₹50,000 to the respondent. This offer was made in an effort to secure an opportunity to present their case before the respondent.

In response, Mr. A.P. Srinivas, learned Senior Standing Counsel for respondents 1, 2, 3, and 5, and Ms. P. Selvi, learned Government Advocate for the 4th respondent, fairly conceded that no opportunity for a personal hearing had been provided to the petitioner prior to the issuance of the impugned order. Both counsel concurred with the petitioner’s offer and requested the court to remit the matter back to the 5th respondent, subject to the agreed payment of ₹50,000.

After hearing both sides and reviewing the available records, the Court observed that the show cause notice, sent to the petitioner’s outdated address, effectively prevented the petitioner from being aware of the proceedings. The Court, therefore, concluded that the assessment order, which confirmed the proposals in the show cause notice, was passed in direct violation of the principles of natural justice. The Court emphasized the necessity of providing an opportunity for the petitioner to establish their case on its merits.

In light of these findings and the petitioner’s willingness to make the payment, the High Court issued a detailed order. The impugned order of April 13, 2024, was set aside, and the matter was remanded to the 5th respondent for fresh consideration. This re-consideration is conditional upon the petitioner paying ₹50,000 to the 5th respondent within four weeks from the receipt of the court’s order. The setting aside of the impugned order will only become effective upon the successful payment of this amount.

Furthermore, the petitioner has been directed to file their reply or objection, along with any necessary documents, within three weeks from the date of the aforementioned payment. Upon receiving these submissions, the 5th respondent is mandated to consider them and issue a clear 14-day notice, fixing a date for a personal hearing. Following this hearing, the 5th respondent is to pass appropriate orders on merits and in accordance with the law, as expeditiously as possible.

A significant consequence of setting aside the impugned order is the lifting of any attachments made on the petitioner’s bank account. The Court opined that with the primary order revoked, the attachment could no longer stand. Consequently, the 6th respondent has been directed to instruct the concerned bank to immediately release the attachment and de-freeze the petitioner’s bank account upon production of proof of the stipulated payment.

With these directions, the writ petition was disposed of, and all connected miscellaneous petitions were also closed. This ruling underscores the judiciary’s commitment to upholding procedural fairness and the principles of natural justice, ensuring that individuals are given a proper opportunity to be heard before adverse orders are passed against them. While specific judicial precedents were not explicitly cited in the provided text, the ruling implicitly relies on the well-established judicial principle of audi alteram partem, which dictates that no person should be judged without a fair hearing in which each party is given the opportunity to respond to the evidence against them. This principle is a cornerstone of natural justice and is frequently invoked in similar cases where a party claims to have been denied a fair opportunity to present their side.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This writ petition has been filed challenging the impugned order dated 13.04.2024 passed by the 5^th respondent.

2. Mr. A.P. Srinivas, learned Senior Standing counsel takes notice on behalf of the respondents 1, 2, 3 & 5 and Ms. P. Selvi, learned Government Advocate, takes notice on behalf of the 4^th respondent. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.

3. The learned counsel for the petitioner would submit that in this case, all notices/communications were sent by the 5^th respondent to the previous address of the petitioner and the same had returned with an endorsement “Addressee Left”. Hence, being unaware of the said communications, the petitioner failed to file their reply within the time. Under these circumstances, the impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner. Therefore, this petition has been filed.

4. Further, he would submit that the petitioner is willing to pay a sum of Rs.50,000/- to the respondent. Hence, he requests this Court to grant an opportunity to the petitioner to present their case before the respondent by setting aside the impugned order.

5. On the other hand, the learned Senior Standing counsel and the learned Government Advocate appearing for the respondents would had fairly admitted that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Therefore, he requested this Court to remit the matter back to the 5^th respondent, subject to the payment of a sum of Rs.50,000/- as agreed by the petitioner.

6. Heard the learned counsel for the petitioner and the learned Senior Standing counsel and the learned Government Advocate for the respondents and also perused the materials available on record.

7. In the case on hand, it is evident that the show cause notice was sent to previous address of the petitioner and the same was returned with an endorsement “Addressee Left”. According to the petitioner, he was not aware of the issuance of the said show cause notice. In such circumstances, this Court is of the view that the impugned assessment order came to be passed without affording any opportunity of personal hearing to the petitioner, confirming the proposals contained in the show cause notice. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice and it is just and necessary to provide an opportunity to the petitioner to establish their case on merits.

8. Further, it was submitted by the learned counsel for the petitioner that the petitioner is willing to pay a sum of Rs.50,000/- to the respondent. In such view of the matter, this Court is inclined to set aside the impugned order dated 13.04.2024 passed by the 5^th respondent. Accordingly, this Court passes the following order:-

(i) The impugned order dated 13.04.2024 is set aside and the matter is remanded to the 5^th respondent for fresh consideration on condition that the petitioner shall pay a sum of Rs.50,000/- to the 5^th respondent within a period of four weeks from the date of receipt of a copy of this order. The setting aside of the impugned order will take effect from the date of payment of the said amount.

(ii) The petitioner shall file their reply/objection along with the required documents, if any, within a period of three weeks from the date of payment of amount as stated above.

(iii) On filing of such reply/objection by the petitioner, the 5^th respondent shall consider the same and issue a 14 days clear notice, by fixing the date of personal hearing, to the petitioner and thereafter, pass appropriate orders on merits and in accordance with law, after hearing the petitioner, as expeditiously as possible.

(iv) Considering the fact that the impugned order itself has been set aside, this Court is of the opinion that the attachment made on the bank account of the petitioner cannot survive any longer and hence, it is to be lifted. As a sequel, the 6^th respondent is directed to instruct the concerned Bank to release the attachment, and de-freeze the bank account of the petitioner, immediately upon the production of proof with regard to the payment made by the petitioner as stated above.

9. With the above directions, this writ petition is disposed of. No costs. Consequently, the connected miscellaneous petitions are also closed