Case Law Details
Silver & C.Z. International Vs Assistant Commissioner (ST) (FAC) (Madras High Court)
Introduction: The Madras High Court recently delivered a judgment in the case of Silver & C.Z. International versus the Assistant Commissioner (ST). The petitioner, engaged in bullion and jewellery trading, challenged an order dated 23.12.2023, citing a breach of natural justice principles.
Detailed Analysis: The petitioner argued that they were unaware of the proceedings leading to the impugned order as the notices were only uploaded on the GST portal, without any other form of communication. They contended that they were denied a fair opportunity to contest the tax demand on its merits. Furthermore, they claimed to have paid taxes both in advance and on subsequent invoices, resulting in an overpayment. The petitioner sought a chance to explain the alleged mismatch in the tax demand.
The government advocate countered, stating that the notices were also sent via email besides being uploaded on the GST portal, hence denying any lack of communication.
The court, upon reviewing the impugned order, found that the tax proposal was confirmed due to the petitioner’s failure to respond to the show cause notice with relevant documents. However, in the interest of justice, the court decided to remand the matter, granting the petitioner an opportunity to contest the tax demand. It was stipulated that the petitioner must remit 10% of the disputed tax demand within three weeks and provide a reply to the show cause notice within the same period. Upon receipt of the reply and satisfaction of the remittance condition, the respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a fresh order within two months.
Conclusion: The Madras High Court’s judgment in the case of Silver & C.Z. International underscores the importance of upholding principles of natural justice in administrative proceedings. While acknowledging the petitioner’s oversight in responding to the show cause notice, the court opted for a fair approach by allowing them an opportunity to present their case. This decision reflects the judiciary’s commitment to ensuring procedural fairness and equitable resolution of disputes.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 23.12.2023 is assailed on the ground of breach of principles of natural justice.
2. The petitioner is engaged in the business of trading of bullion and jewellery. The petitioner asserts that he was unaware of proceedings culminating in the impugned order because the intimation and show cause notice were uploaded on the “View Additional Notices and Orders” tab on the GST portal and not communicated to the petitioner through any other mode.
3. Learned counsel for the petitioner submits that the petitioner was denied a reasonable opportunity to contest the tax demand on merits. He further submits that the petitioner paid taxes not only on the advance but also thereafter on the invoices. As a result, he submits that excess tax was paid. If provided an opportunity, he submits that the petitioner would be in a position to explain the mismatch which form the basis of the confirmed tax demand.
4. Mr.V.Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. He points out that the show cause notice and impugned order were communicated to the petitioner not only by uploading the same on the GST portal but also through e-mail. Therefore, he contends that no case is made out for interference with the impugned order.
5. On perusal of the impugned order, it is clear that the tax proposal was confirmed only because the petitioner failed to reply to the show cause notice by enclosing relevant documents. Therefore, it is just and appropriate that the petitioner be permitted to contest the tax demand on merits, albeit by putting the petitioner on terms.
6. On instructions, learned counsel for the petitioner submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for remand.
7. For reasons set out above, the impugned order dated 23.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of three weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner’s reply.
8. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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