Case Law Details

Case Name : GRT Hotels & Resorts Pvt. Ltd. Vs. State of Andhra Pradesh & Anr (Andhra Pradesh HC)
Appeal Number : WP No. 7584 of 2021
Date of Judgement/Order : 06/04/2021
Related Assessment Year :

GRT Hotels & Resorts Pvt. Ltd. Vs  State of Andhra Pradesh & Anr (Andhra Pradesh HC)

In M/s. GRT Hotels & Resorts Pvt. Ltd., Vs.  State of Andhra Pradesh & Anr (Writ Petition No. 7584 of 2021 dated: 06.04.2021, it is held that, Sub-Section (4) of Section 75 of the Central Goods & Services Tax Act, 2017 (CGST Act for short), in clear and vivid terms, stipulates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.

Facts of the Case

  • The Assistant Commissioner of State Tax, Ramachandrapuram, East Godavari District, being the second respondent herein on 06.01.2021, issued a show cause notice, calling upon the petitioner to show cause as to why tax of ₹10,04,022.00 should not be imposed, granting fifteen days’ time to the petitioner to file objections/arguments from the date of receipt of the said notice. However, the petitioner has failed to file any objections within the time stipulated. Against this backdrop, the only contention advanced by the petitioner in the present Writ Petition is that, in contravention of the mandatory provisions of Section 75 of the CGST Act, in general and sub-Section (4) of Section 75 of the Act in particular, the second respondent assessing officer passed the impugned order.
  • Per contra, the respondent argued that, having failed to respond to the show cause notice issued by the second respondent herein, within the time stipulated, petitioner is estopped from questioning the validity and the legal sustainability of the impugned order passed by the second respondent on 09.02.2021. In the instant case, the assessing officer passed the impugned order under Section 75 of the Act and Rule 142 (5) of the Central Goods and Services Tax Rules, 2017 framed thereunder, which is under challenge in the writ petition.

Held by the Court

  • The short question that arises for consideration of the Court in the present Writ Petition is that; “Whether the questioned order, dated 09.02.2021, passed by the second respondent, is sustainable and tenable having regard to the provisions of Section 75 (4) of the Act?
  • Sub-Section (4) of Section 75 of the Act deals with the general provisions relating to determination of tax. Sub-Section (4) of Section 75 of the Act, in clear and vivid terms, stipulates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. In the instant case, though show cause notice was issued on 06.01.2021, asking the petitioner herein to submit objections, in the considered opinion of the Court, second respondent herein, before resorting to the impugned action, ought to have served on the petitioner the notice of personal hearing, indicating the date of hearing, according to the second limb of sub-Section (4) of Section 75 of the Act. In the instant case, the said mandatory requirement is not complied with. On this ground alone, the Court is inclined to set aside the impugned order, dated 09.02.2021.
  • For the aforesaid reasons, Writ Petition is allowed, setting aside the order of the second respondent, vide A.O. No. ZH370221OD39587, dated 09.02.2021, and the matter is remanded to the second respondent herein for fresh consideration and for passing appropriate orders after giving opportunity of personal hearing to the petitioner. It is made clear that, in order to have a quietus for the issue, petitioner is permitted to submit objections, if any, within a period of one week from the date of receipt of a copy of the order of the court.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Heard Sri Kailashnath P.S.S., learned counsel for the petitioner, and Sri T.C.D.Sekhar, learned Government Pleader for Commercial Tax, appearing for the respondents, apart from perusing the entire material available on record.

Challenge in the present Writ Petition is to the order of demand passed by the Assistant Commissioner of State Tax, Ramachandrapuram, East Godavari District-second respondent herein vide A.O.No.ZH370221OD39587, dated 09.02.2021. The second respondent herein vide Ref.GSTIN.No.37AAACG3608B1Z5, dated 06.01.2021, issued a show cause notice, calling upon the petitioner herein to show cause as to why tax of Rs.10,04,022/- should not be imposed, granting fifteen days time to the petitioner herein to file objections/arguments from the date of receipt of the said notice. Admittedly, petitioner herein did not file any objections within the time stipulated.

The only contention advanced by the learned counsel for the petitioner in the present Writ Petition is that, in contravention of the mandatory provisions of Section 75 of the Central Goods and Services Tax Act, 2017 (for brevity, ‘the Act’) in general and sub-Section (4) of Section 75 of the Act in particular, the second respondent herein passed the impugned order.

On the contrary, it is strenuously contended by the learned Government Pleader that, having failed to respond to the show cause notice issued by the second respondent herein, within the time stipulated, petitioner herein is estopped from questioning the validity and the legal sustainability of the impugned order passed by the second respondent on 09.02.2021. In the instant case, second respondent herein passed the impugned order under Section 74 of the Act and Rule 142 (5) of the Central Goods and Services Tax Rules, 2017 framed thereunder.

The short question that arises for consideration of this Court in the present Writ Petition is:

“Whether the questioned order, dated 09.02.2021, passed by the second respondent, is sustainable and tenable having regard to the provisions of Section 75 (4) of the Act?.

Sub-Section (4) of Section 75 of the Act deals with the general provisions relating to determination of tax. Sub-Section (4) of Section 75 of the Act, in clear and vivid terms, stipulates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.

In the instant case, though show cause notice was issued on 06.01.2021, asking the petitioner herein to submit objections, in the considered opinion of this Court, second respondent herein, before resorting to the impugned action, ought to have served on the petitioner the notice of personal hearing, indicating the date of hearing, according to the second limb of sub-Section (4) of Section 75 of the Act. In the instant case, the said mandatory requirement is not complied with. On this ground alone, this Court is inclined to set aside the impugned order, dated 09.02.2021.

For the aforesaid reasons, Writ Petition is allowed, setting aside the order of the second respondent, vide A.O.No.ZH370221OD39587, dated 09.02.2021, and the matter is remanded to the second respondent herein for fresh consideration and for passing appropriate orders after giving opportunity of personal hearing to the petitioner herein. It is made clear that, in order to have a quietus for the issue, petitioner herein is permitted to submit objections, if any, within a period of one week from the date of receipt of a copy of this order. There shall be no order as to costs.

As a sequel thereto, miscellaneous petitions, pending if any, shall stand closed.

******

Author/Blogger:  Aji V. Dev, Advocate, High Court of Kerala at Aji V. Dev & Associates, Ernakulam, Kochi, available at [email protected]/[email protected]/9447788404 

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I am Aji V. Dev, a practising lawyer in the High Court of Kerala, Ernakulam. I hail from Vallicodu- Kottayam a beautiful village near to Pathanamthitta in the Kerala state of India, where undulating hills decorated by tall trees and lush green vegetation descends to the paddy fields in a rhythmic wa View Full Profile

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