Case Law Details
Principle Mahendra Private Limited Vs DCIT (Karnataka High Court)
In Principle Mahendra Private Limited Vs DCIT, the Karnataka High Court set aside a GST order dated 13.04.2023 due to the lack of a personal hearing as required under Section 75(4) of the CGST Act. The petitioner challenged the order, arguing that their reply was rejected for being filed late and that they were not afforded a hearing. The court noted that despite the late reply, the petitioner had explicitly requested a personal hearing, which was ignored by the authorities. The court emphasized that the mandate under Section 75(4) requires such a request to be considered, and failing to do so constituted a procedural violation. Consequently, the impugned order was set aside, and the case was remanded to the authorities for a fresh hearing, allowing the petitioner to present their arguments and additional legal contentions. The petitioner was also directed to pay Rs. 10,000 in costs for the delayed reply. The court instructed the petitioner to appear before the respondent on 9.6.2023, failing which the authorities could proceed as if no order had been passed.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. The petitioner has called in question the correctness of the order passed on 13.4.2023 under Sections 73(9), 50 & 122(2) of the Karnataka Goods and Services Tax Act (KGST) / Central Goods and Services Tax Act, 2017 (CGST) / Section 20 of the Integrated Goods and Services Tax Act, 2017 (IGST) read with Rule 142(5) and (6) of the KGST Rules, 2017 for the Tax Period 2017-18 (July 2017-March 2018) passed in the case of the petitioner by the first respondent (Annexure-A).
2. It is the primary contention of the petitioner that the impugned order passed is without affording an opportunity of hearing and that their reply filed in Form DRC 06 has been rejected as having been belatedly filed. It is submitted even if reply was filed belatedly, the obligation under Section 75 of the CGST Act, 2017 to afford an opportunity of hearing under Section 75(4) cannot be done away with.
3. Learned counsel for the Revenue would submit that, admittedly reply is filed beyond the period prescribed under Section 73(8) of the Act and rightly not been considered. It is further contended that, Section 75(4) of the Act requires request for an opportunity of hearing and as the request for opportunity of hearing having been made in the reply has been rejected, question of complying with the mandate of Section 75(4) of the Act does not arise and accordingly, submits that no case is made out for interference at this stage and the alternative remedy should be availed off as provided under Section 107 of the Act.
4. Heard both sides.
5. Admittedly reply has been rejected stating that, it was beyond the period prescribed. However, it must be noticed that though the reply itself came to be rejected as having been filed belatedly, in the reply filed by the petitioner, at paragraph (11) enclosed at Annexure-M he has made a request for personal hearing which reads as follows :
“Noticee wishes to be personally heard if order to the contrary is contemplated”
6. The mandate under Section 75(4) of the CGST Act, 2017 is clear that, when a written request is made from the person chargeable with tax or penalty seeking for personal hearing, the same is required to be considered. Clearly there is violation of the mandate under Section 75(4) of the Act and the submission of the learned counsel for the Revenue that the request for personal hearing was made out in the reply, which having been rejected, the request for personal hearing is also to be rejected is a hyper technical interpretation which has resulted in rejection of the opportunity under Section 75(4) of the Act, which cannot be accepted. Accordingly, case is made out for setting aside the impugned order in the light of the violation of the non granting of opportunity of personal hearing under Section 75(4) of the Act and the respondents are directed to afford an opportunity of personal hearing before proceeding with the order.
6. In the light of the order being passed, in order to meet the ends of justice, it is just and appropriate to direct the Authority to look into the reply that has been filed by the petitioner and also permit the petitioner to raise additional legal contentions as has been raised in the present writ petition. The petitioner however, is liable to pay costs of Rs.10,000/- to the respondents for lapse in filing a delayed reply.
7. Accordingly, the impugned order at Annexure-A is set aside. The petitioner to appear before respondent No.1 on 9.6.2023. It is made clear that if the petitioner does not avail of such opportunity, the respondents would be at liberty to proceed as if no order has been passed in this matter.
Author Bio
