Invoice not produced due to Covid-19: Bombay HC directs reconsideration

Nitco Paints Pvt. Ltd. Vs Union of India and Anr. (Bombay High Court)

In the case of Nitco Paints Pvt. Ltd. vs. Union of India and Anr., the Bombay High Court addressed the issue of an order passed without allowing the petitioner, Nitco Paints Pvt. Ltd., the opportunity to produce invoices for verification. This situation arose primarily due to the constraints imposed by the COVID-19 pandemic and the resulting lockdowns.

The petitioner argued that the adjudicating authority (Respondent No. 2) failed to provide adequate opportunity to submit necessary invoices for verification. The impugned order, dated 3rd June 2021, was issued based on the available documents, without considering the petitioner’s situation during the pandemic.

Court’s Observations and Directions:

• Opportunity to Produce Invoices: The court noted that in paragraph 5.5 of the impugned order, it was acknowledged that the petitioner could produce the invoices for verification. The noticee (petitioner) had communicated their willingness to submit the invoices, but due to the pandemic and the state-imposed lockdown, they were unable to do so.
• Impugned Order Quashed: Without delving into the merits of the case, the court quashed the impugned order dated 3rd June 2021. The matter was remanded to Respondent No. 2 for reconsideration, ensuring that all rights and contentions of the parties on merits were kept open.
• Detailed and Reasoned Order: Respondent No. 2 was directed to pass a reasoned and detailed order addressing all contentions and submissions of the petitioner. A personal hearing was mandated, with notice to be communicated at least seven working days in advance.
• Written Submissions: The petitioner was allowed to file written submissions within five working days of the personal hearing.
• Submission of Further Documents: If the petitioner wished to file additional documents or copies of invoices, they were required to do so within six weeks from the date of the court’s order.
•  Additional Documents and Clarifications: The adjudicating authority, if requiring further documents or clarifications, had to provide a list to the petitioner within two weeks thereafter. The petitioner was given at least three weeks to produce these documents.
• Physical Verification: If necessary, the petitioner was required to produce the documents for physical verification during the personal hearing.
• Disposal Timeline: The show cause notices were to be disposed of on or before 15th December 2024.

The Bombay High Court emphasized the importance of fair proceedings and the need to consider the unique challenges posed by the COVID-19 pandemic. By remanding the matter for a de novo consideration, the court ensured that the petitioner would have a fair opportunity to present their case with all necessary documentation, thereby upholding principles of natural justice.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1 After the Petition was heard for sometime, we were satisfied that the adjudicating authority viz. Respondent No.2 ought to have given an opportunity to petitioner to produce the invoices for verification. In fact, in paragraph 5.5 of the impugned order, it is recorded that the noticee had informed that they can produce the invoices for verification, and noticee was informed to produce the same to the Superintendent, CGST, R-IV, Dn-VIII, Mumbai south for verification, but due to COVID-19 pandemic, lock down announced by the State Government, the noticee could not produce the invoices for verification. Despite that the impugned order has been passed on the basis of the available documents. In our view, it was not proper thing to do.

2 Under these circumstances, without going into the merits of the matter, and keeping open all rights and contentions of parties on merits, we quash and set aside the impugned order dated 3rd June 2021 and remand the matter for denovo consideration to Respondent No.2.

3 Respondent No.2 shall pass a reasoned and detailed order dealing with all contentions and submissions of petitioner after giving a personal hearing, notice whereof shall be communicated atleast 7 working days in advance.

4 Should petitioner wish to file written submissions, the same may be filed within 5 working days of personal hearing.

5 If petitioner wishes to file any further documents or copies of invoices, copies thereof shall be filed within 6 weeks from the date this order is uploaded.

6 Within 2 weeks thereafter, should adjudicating authority need any further documents or clarification, a list thereof shall be provided to petitioner and further 3 weeks atleast shall be given to petitioner to produce those documents. If after producing those documents, the adjudicating authority feels it is necessary to make physical verification of the documents, petitioner will produce those documents during the course of personal hearing.

7 Show cause notices shall be disposed of on or before 15th December 2024.

8 Petition disposed.