Case Law Details
Mahindra & Mahindra Limited Vs Union of India (Chhattisgarh High Court)
The recent ruling by the Chhattisgarh High Court, Bilaspur, in the case of Mahindra & Mahindra Limited vs. Union of India sheds light on the intricacies of procedural fairness under the CGST Act. The petitioner, a motor vehicle manufacturer, challenged an adverse order under Section 73, alleging a violation of principles of natural justice.
The case stemmed from a show cause notice issued to Mahindra & Mahindra Limited under Section 73(1) of the Central Goods and Services Tax (CGST) Act, 2017. The notice raised questions regarding the payment of tax and input tax credit. Despite seeking an extension to file a reply and appear for a personal hearing, an order was passed without granting adequate opportunity to the petitioner.
The crux of the appeal rested on the interpretation of Section 75(4) and (5) of the CGST Act, which mandate an opportunity for hearing and provide guidelines for adjournments. The appellant contended that the order lacked adherence to these provisions, thereby violating principles of natural justice.
The judgment articulated the following key points: (i) Section 75(4) underscores the necessity of a personal hearing prior to the issuance of any adverse order; (ii) In accordance with Section 75(5), the provision of three opportunities for a hearing must be tailored to the specific facts and circumstances of each case; (iii) It was emphasized that scheduling a hearing before the receipt of a reply to the show cause notice renders it illusory and devoid of substance, thus necessitating the scheduling of hearings post-reply submission; (iv) The court reiterated that oral arguments cannot serve as a substitute for a written reply, citing a series of English judgments as authoritative precedents; (v) Contrary to the notion that alternate remedies serve as an absolute bar, the judgment clarified that when the fundamental principles of natural justice are violated, the availability of an alternate remedy does not preclude judicial intervention.
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