Case Law Details
Anita Bansal Vs Union of India & Anr. (Delhi High Court)
In the case of Anita Bansal Vs Union of India & Anr., the Delhi High Court recently delivered a significant judgment regarding the issue of Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017. The petitioner challenged an order dated 30.12.2023, which disposed of a Show Cause Notice (SCN) proposing a substantial demand against her. The crux of the matter lay in her inability to respond to the notice due to her husband’s demise.
The petitioner’s contention revolved around her failure to attend the hearing scheduled for 20.12.2023, as her husband passed away on the same day after a prolonged illness. Despite the circumstances, the impugned order disposed of the SCN solely on the ground of the petitioner’s non-response. However, the petitioner submitted medical records attesting to her husband’s illness and subsequent demise, which hindered her ability to engage with the notice.
The Delhi High Court, upon examining the facts, acknowledged the petitioner’s legitimate grounds for non-compliance. The court emphasized the principle of natural justice and deemed it necessary to grant the petitioner an opportunity to respond to the SCN. Consequently, the court set aside the impugned order dated 30.12.2023 and remitted the matter to the Proper Officer for re-adjudication in accordance with the law.
The court directed the petitioner to file a reply to the SCN within 30 days, following which the Proper Officer would conduct a fresh adjudication, providing the petitioner with a chance for personal hearing. This decision underscores the court’s commitment to upholding procedural fairness and ensuring that parties are not unjustly prejudiced due to circumstances beyond their control.
Additionally, the court left open the challenge to Notification No. 9 of 2023 concerning the initial extension of time, indicating a broader scrutiny of procedural aspects in tax matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Petitioner impugns order dated 30.12.2023, whereby the impugned Show Cause Notice dated 23.09.2023, proposing a demand of Rs.21,11,088.00 against the Petitioner has been disposed of and a demand including penalty has been raised against the Petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act).
2. Issue notice. Notice is accepted by learned counsel appearing for respondent.
3. With the consent of the parties, petition is taken up for final disposal today.
4. Perusal of the Show Cause Notice dated 23.09.2023 shows that the Department has given the heading of excess claim of Input Tax Credit [“ITC”].
5. Thereafter, the impugned order passed on the said show cause notice records that a demand as ex-parte is created. It states that “And whereas, it is noticed that the Taxpayer neither filed reply/explanation within stipulated period nor appeared for Personal Hearing before Proper Officer on the given date and time, Further, another opportunity to submit reply and for the sake of natural justice opportunity for Personal Hearing, as per provision of Section 75(4) DGST Act, was also accorded to the taxpayer by issuing “REMINDER” through the GST portal. ***** Now, since no reply / explanation has been received from the taxpayer despite sufficient and repeated opportunities, which indicates that the taxpayer has nothing to submit in the matter. ***** In view of aforesaid circumstances, the undersigned is left with no other option but to decide the matter ex-parte, in accordance with the provisions of CGST / DGST Act & Rules, 2017”
6. Learned counsel for petitioner submits that the petitioner could not respond to the Show Cause Notice as on the date fixed for hearing i.e. 20.12.2023, the husband of the proprietor expired and thereafter the default assessment order has been issued.
7. Perusal of the order shows that the order has been passed disposing of the Show Cause Notice solely on the ground that no reply/explanation has been received from the tax payer. Petitioner has also annexed the medical record of the husband of the petitioner which shows that he was admitted in the hospital on 04.11.2023 and thereafter expired on 20.12.2023 after a prolonged illness.
8. We are of the view that the petitioner was prevented from filing a response to the Show Cause Notice on account of serious illness of her husband. Accordingly, petitioner is liable to be granted an opportunity to respond to the Show Cause Notice.
9. In view of the above, the impugned order dated 30.12.2023 which had been passed solely on account that petitioner had not filed a reply is set aside and the matter is remitted to the Proper Officer to re- adjudicate the same in accordance with law.
10. Petitioner shall file a reply to the Show Cause Notice within a period of 30 days from today. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act.
11. The challenge to Notification No. 9 of 2023 with regard to the initial extension of time is left open.
12. Petition is disposed of in the above terms.
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